Petition — Truckee-Carson Irrigation District v. United States

81 2276 FILED

. 0 1982

0. » —

In the Supreme Court

OF THE

United States

Octroser Term 1981

Truckee-Carson Irrigation District,

Petitioner,

VS.

Unrtep Srates or AMErica and

Pyramip Lake PalurkE Trise or IN DIANs,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT

Jounson & Apams, Lp.

James W. Jounson, JR.

111 California Avenue

Reno, Nevada 89509

Telephone (702) 323-8616

Knoxick, Moskovrrz,

TrepeEMANN & Gmanp

A Professional Corporation

Freperick G. Grrarp

Currorp W. Schurz

Janet K. Golbsuirrn

COUNSEL OF RECORD

555 Capitol Mall, Suite 900

Sacramento, CA 95814

Telephone (916) 444-8920

Attorneys for Truckee-Carson

Irrigation District

BOWNE-PERNAU WALSH © 190 NINTH ST. © &.F., CA 84103 © (415) 864-2300

QUESTIONS PRESENTED

I

Whether, in a comprehensive water rights adjudication,

adversity of claims must appear on the face of the plead-

ings before the doctrine of res judicata/collateral estoppel

can be asserted as a bar to relitigation of the same claims

in subsequent actions.

II

Whether the Secretary of the Interior is authorized to

negotiate and settle property disputes between Indians

and non-Indians, or whether, instead, he must litigate them

to final judgment.

PARTIES TO THE ACTION

This action involves more than seventeen thousand

individual parties, including several thousand landowners

who are represented by petitioner Truckee-Carson Irriga-

tion District. These parties have been listed in a filing sub-

mitted to this Court by the State of Nevada, which filing

accompanies its petition for certiorari in this case. Because

preparation of a separate such list to accompany this

petition would be burdensome, repetitious and impracti-

cable, petitioner Truckee-Carson Irrigation District hereby

adopts and incorporates herein the list of parties submitted

by the State of Nevada.

ii

TABLE OF CONTENTS

Questions presented — — ee

Parties to the actio/n

KK

—

Statutory provisions involved

Statement of the case

A. The special importance of this case

Basis for jurisdiction below

Argument

I

The decision of the Ninth Circuit subverts the prin-

ciples of res judicata and collateral estoppel estab-

lished by this court

II

The decision below conflicts with decisions of five other

circuit courts of appeals

III

The decision of the Ninth Circuit frustrates the im-

portant federal policy of promoting certainty of

water rights

A. Western water right claims are comprised of

two elements: priority date and amount of en-

titlement

B. The United States must assert multiple claims in

comprehensive water right adjudications ............

13

17

17

iii

TaBLe or ConTENTS

Page

C. Requiring strict “pleading adversity” of claims

would threaten privately held water rights on

the Truckee River and throughout the West 20

D. Factual adversity between claims is inherent in

a comprehensive water right adjudication .......... 22

IV

The Ninth Circuit misapplies this court’s rulings in

holding that the secretary of the interior was not

authorized to negotiate and execute an out of court

settlement of disputed indian water rights 24

Conclusion 30

iv

TABLE OF AUTHORITIES CITED

Cases

Allen v. McCurry, 449 U.S. 90, 101 S.Ct. 411 (1980) ...... 10

Arizona v. California, 373 U.S. 546, 83 S.Ct. 1468

116 19

Blonder-Tongue Laboratories Inc. v. University of

Illinois Foundation, 402 U.S. 313, 91 S. Ot. 1434

3 . 9, 10, 16

Chicago, R. L &. P. Ry. Co. v. Schendel, 270 U.S. 611, 46

3 — T 23

Colorado River Water Conserv. Dist. v. United States,

424 U.S. 800, 96 S.Ct. 1236 (1976) 7, 12, 18, 19, 22, 23, 24

Commissioner v. Sunnen, 333 U.S. 591, 68 S.Ct. 715

(1948) ee

Diamond Shamrock Corp. v. Lumbermens Mutual

Casualty Co., 416 F.2d 707 (7th Cir. 19699 15

Ickes v. Fox, 300 U.S. 82, 57 S.Ct. 412 (19377 21

Livesay Industries, Inc. v. Livesay Window Co., 202

F.2d 378 (5th Cir. 1953) 14

Montana v. United States, 440 U.S. 147, 99 S.Ct. 970,

(1979) 9, 10, 11, 24

Morgan v. Udy, 79 P.2d 295 (Idaho 1938) 23

National Bondholders Corp. v. Seaboard C. Nat. Bank,

110 F.2d 138 (4th Cir. 1940) 14

Oldham v. Pritchett, 599 F.2d 274 (8th Cir. 1979) 16

Organized Village of Kake v. Egan, 369 U.S. 60, 82

S.Ct. 562 (1962) 27, 28, 29

Parklane Hosiery Co., Inc., v. Shore, 439 U.S. 322, 99

S.Ct. 645 (1979) ...... 10

V

Taare or Autuerities Crrep

Cases

Page

Scooper-Dooper, Inc. v. Kraftco, 494 F.2d 840 (3d Cir.

1974) 15, 16

Sea-Land Services Inc. v. Gaudet, 414 U.S. 573, 94

S.Ct. 806 (1974) 10

Standefer v. United States, 447 U.S. 10, 100 S.Ct. 1999

(1980) 10

T. J. Starker v. United States, 602 F.2d 1341 (9th Cir.

1979) 11

United States v. Ahtanum Irr. Dist., 236 F. 2d 321 (9th

Cir. 1956) 25, 26, 27

United States v. Alpine Land and Reservoir Co., 503

F.Supp. 877 (D. Nev. 1980) 19

United States v. District Court, County of Eagle, Colo-

rado, 401 U.S. 520, 91 S. Ot. 998 (1971) 19

United States v. New Mexico, 438 U.S. 696, 98 S.Ct.

3012 8, 19

United States v. Orr Water Ditch Co., Equity No. A-3

passim

United States v. Title Insurance and Trust Co., 265

U.S. 472, 44 S.Ct. 621 (1924) 24

Winters v. United States, 207 U.S. 564, 28 S.Ct. 207

(1908) 2, 3,10, 11

vi

Tasie or AuTHorities Crrep

Statutes

Page

25 U.S.C.:

Section 2 * 1, 7, 25, 26, 28

Section 9 LET <A 2, 7, 25, 28

28 U.S. C.:

Section 1254 (1) x 1

Section 1345 . 9

r 21

en 18

Rule

. ü A 1

Other Authorities

“MX Missile Decision”, Cong. Quarterly, June 5, 1981,

p. 411 18

Newsweek, June 8, 1981, p. 40 18

S. Rept. No. 755, 82d Cong. Ist Sess., pp. 4-5 (1951) ... 22

Scott on Trusts, §§ 283-285, pp. 47-51 (19677 21

No.

In the Supreme Court

United States

Ocroser Term 1981

Truckes-Carson Irrigation District,

Petitioner,

vs.

Unrrep Srates or America and

Praaum Lake Parure Tux or Ixbiaxs,

Respondents.

PETITION FOR WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR THE

NINTH CIRCUIT

OPINIONS BELOW

The decision of the United States Court of Appeals for

the Ninth Circuit is reported at 649 F.2d 1286. Subsequent

to its publication, the decision was amended by order of the

Court entered January 5, 1982. Both the decision and the

order are reproduced in the Appendix (App., pp. 1, 66).

The decision of the District Court is embodied in its

Memorandum Decision and its Findings of Fact and Con-

clusions of Law entered December 12, 1977. The District

Court’s decision was not published; it is reproduced in the

Appendix (App., pp. 72, 94).

JURISDICTION

The decision of the United States Court of Appeals for

the Ninth Circuit was entered on June 15, 1981, and

amended by its order of January 5, 1982. Petitions for re-

hearing were filed by defendant Truckee-Carson Irrigation

District, petitioner herein; by plaintiff-intervenor Pyramid

Lake Paiute Tribe of Indians; and by defendant-intervenor

State of Nevada. All petitions for rehearing were denied by

order of the Court of Appeals filed March 11, 1982.

A petition for certiorari is therefore due June 9, 1982. This

Court’s jurisdiction is invoked under 28 U.S.C. 1254(1) and

Rule 17.1 of this Court.

STATUTORY PROVISIONS INVOLVED

One of the issues raised by this case concerns the extent

the Secretary of the Interior’s authority to manage fed-

eral property held in trust for the Indians. The following

statutes are involved in that issue:

25 U.S.C. § 2:

The Commissioner of Indian Affairs shall, under

the direction of the Secretary of the Interior, and

agreeably to such regulations as the President may

prescribe, have the management of all Indian affairs

and of all matters arising out of Indian relations.

25 U.S.C. 69:

The President may prescribe such regulations as

he may think fit for carrying into effect the various

provisions of any act relating to Indian affairs, and

for the settlement of the accounts of Indian affairs.

STATEMENT OF THE CASE

This case involves rights to the waters of the Truckee

River, a major stream which originates in the Sierra

Nevada mountains of California and Nevada. The Truckee

flows out of Lake Tahoe through California for a distance,

then through the arid Western Nevada desert past the

cities of Reno and Sparks, finally terminating in a large

saline desert lake known as Pyramid Lake, which has no

outlet. Pyramid Lake is located in the Pyramid Lake

Indian Reservation, a reservation which was established by

executive order for the benefit of the Pyramid Lake Paiute

Tribe of Indians (hereinafter referred to as ‘the Tribe”).

The waters of the Truckee River are used upstream from

the reservation by the Sierra Pacific Power Company to

generate electric energy, by the residents of Reno and

Sparks for domestic and municipal purposes, by hundreds

of irrigators on the Truckee River, and by several thou-

sand farmers and their families on the 73,000 acre New-

lands Project, a federal reclamation project, for irrigation,

stock watering, and domestic purposes.

This litigation was commenced by the United States, on

behalf of the Tribe, to assert a Winters doctrine reserved

water right’ to Truckee River flows sufficient to sustain

"In Winters v. United States, 207 U.S. 564, 28 S.Ct. 207 (1908)

this Court held that in establishing the Fort Belknap Indian Reser-

vation, the federal government had impliedly reserved sufficient

a naturally spawning fishery in Pyramid Lake and the

lower reaches of the river. For this right, the United States

asserts a priority date of 1859, the earliest priority on the

entire river. To establish this asserted right, the United

States joi ed as defendants all of the other known diver-

ters of Truckee River flows in Nevada, the State of Nevada,

the Sierra Pacific Power Company, the Washoe County

Water Conservation District, the Cities of Reno and

Sparks, some 17,000 individuals, and the Truckee-Carson

Irrigation District, petitioner herein (sometimes herein-

after referred to as “TCID” or “the District”). Because

the District Court found that TCID could adequately

represent the interests of the thousands of farmers on the

Newlands Project, the United States was not required to

name and serve them individually.

The defendants asserted that the United States was

barred by res judicata/collateral estoppel from asserting

this claim for additional water from the Truckee because

of the final judgment entered in an earlier comprehensive

adjudication of water rights in the Truckee River, United

States v. Orr Water Ditch Co., Equity No. A-3, in the

United States District Court for the District of Nevada

(hereinafter referred to as “Orr Ditch”).

The United States contended that because it had as-

serted the rights of both the Pyramid Lake Indian Reser-

vation and the Newlands Reclamation Project in the Orr

Ditch case, its representation of the Tribe had been inade-

quate, with the result that the United States was neither

bound by the Orr Ditch Final Decree nor prohibited from

asserting additional reserved water rights in this later

separate action.

rights to water from the river running through the reservation to

accomplish the purposes of the reservation. Thus, water rights ap-

purtenant to federal reservations are referred to as “Winters doc-

trine rights” or “reserved water rights.”

4

The trial of this action was bifurcated. The first phase

addressed the issue of whether the final judgment in Orr

Ditch operated to raise the bar of res judicata/collateral

estoppel against the United States’ attempt to seek addi-

tional water for the Pyramid Leke Indian Reservation in

this litigation. If the United States were not so barred,

the second phase of the trial in this action would determine

whether, and in what amount, a reserved water right for

fishery purposes may be implied, under the Winters doc-

trine, for the Pyramid Lake Indian Reservation.

The District Court, after forty-one days of trial on the

issue of preclusion, entered judgment against the plaintiffs

and dismissed their complaint. It analyzed the historical

facts concerning Orr Ditch, and found that the Orr Ditch

Final Decree did bar the United States from asserting

any new claims to Truckee River water.

The District Court made the following findings concern-

ing the Orr Ditch litigation:

(a) The United States commenced the Orr Ditch litiga-

tion in order to obtain a final and comprehensive adjudi-

cation of all the water rights and claims on the Truckee

River and its tributaries. In that litigation, the United

States pursued two separate claims for water rights on the

river: one for the Pyramid Lake Indian Reservation, with

an 1859 priority (the most senior water right on the river) ;

and one for the Newlands Project upstream, with a 1902

priority (the most junior water right on the river at that

time) (App., pp. 99, 100).

(b) After a trial, the Special Master assigned to the Orr

Ditch case proposed findings. Hearings on the proposed

findings were held and a Temporary Restraining Order

was entered, in 1926, to test the proposed decree before

entry of final judgment (App. p. 101).

(c) Nine years later in 1935, a negotiated settlement,

known as the Truckee River Agreement, was executed by

the major water users on the stream. The parties to this

agreement were the United States, Washoe County Water

Conservation District, Sierra Pacific Power Company, the

Truckee-Carson Irrigation District, and others.“ The

Truckee River Agreement proposed a physical solution to

the problem of water distribution on the river. It pro-

vided that a final decree in the litigation based on its

negotiated terms would be entered only afte: construction

of an upstream storage facility, Boca Reservoir (App.,

pp. 102, 110).

(d) Congressional authorization of the reservoir was

obtained and the Boca Reservoir was built. Thereafter,

upon motion of all the signatories to the Truckee River

Agreement, including the United States and TCID, the

District Court held three days of hearings, and entered

a final decree on September 8, 1944. The final decree incor-

porated the agreed-upon settlement of the water rights,

including the water rights of the Pyramid Lake Reserva-

tion which were greater than those proposed by the Special

Master. Under the decree the reservation’s rights were in-

creased in both acreage and water duty. However, the res-

ervation’s decreed right did not include flows specifically

for the maintenance of a fishery. (App., pp. 102, 103, 110).

was organized after the entry of the Temporary Restrain-

ing Order in 1926. Hence, at that time the United States repre-

proceedings.

the United States in fact represented only one interest,

that of the Tribe.

6

(e) Finally, the Orr Ditch Final Decree permanently

enjoined the parties to the litigation, and their successors,

from ever asserting any right to additional waters from

the Truckee River (App. pp. 185, 247). It was this decree

that the District Court found created a res judicata bar

and prohibited the assertion of any new reserved water

rights after the water users in the region had relied on the

finality of the previously adjudicated rights for nearly

forty years.

In finding the above facts sufficient to warrant invoca-

tion of res judicata, the District Court addressed the issue

of the federal government's inescapable duty to represent

multiple and often inconsistent federal interests in litiga-

tion, and the authority of the executive branch to reconcile

and choose between such interests. Cungress was aware,

the District Court held, of the inevitable clash between In-

dian interests and the interest of the government in open-

ing and settling the West, and Congress has consciously

given reclamation a higher priority. Thus, the District

Court concluded, the Secretary of the Interior had been

authorized to manage the Orr Ditch litigation as he had,

with the result that any unasserted claims on behalf of the

Pyramid Lake Reservation had been extinguished by the

Orr Diich Final Decree.

On appeal, the Ninth Circuit Court of Appeals upheld

the District Court’s dismissal as to every defendant except

TCID. It expressly held that even subsequent appropria-

tors who had not been parties to Orr Ditch bui had rea-

sonably relied on the finality of the Orr Ditch decree were

entitled to rely on it, and could assert the bar of res judi-

cata/collateral estoppel against the United States in this

action.

As to TCID, however, the court held that because its

interests, and, inferentially, the interests of the landown-

7

ers and water users within TCID’s boundaries, had been

represented by the United States in the prior action, TCID

could not raise the defense of res judicata/collateral estop-

pel. The reasoning which the court offered for this conclu-

sion was that a prior judgment does not preclude later

litigation of the same matter between parties to the prior

suit, if they were not “adversaries under the pleadings.”

Because the “requirement that adversity be explicitly estab-

lished on the record, by pleadings” (App., p. 55) was not

satisfied in the Orr Ditch case, the court said, the United

States is free to relitigate the existence and amount of its

water right for the Pyramid Lake Indian Reservation, but

only against TCID, and only to the extent of the water

rights decreed to the United States for the Newlands

Project in the Orr Ditch Final Decree.

The Ninth Circuit also indicated, by way of footnote, that

the Secretary of the Interior (hereinafter referred to as

“the Secretary”) has no authority under 25 U.S.C. §2 or

25 U.S.C. § 9 to negotiate and compromise disputed prop-

erty claims between Indians and non-Indians (see App.,

p. 29, n. 10). Therefore, even though the United States

did not represent the Newlands Project farmers in the

negotiation of the Truckee River Agreement, the Ninth

Circuit held that the agreement was not a bar to the new

litigation.

A. The special importance of this case

The Ninth Circuit’s decision has significant potential for

unsettling long-established rights throughout the arid West.

As this Court has observed, Indian water rights in the

Southwest are ubiquitous (Colorado River Water Conserv.

Dist. v. United States, 424 U.S. 800, 811, 96 S.Ct. 1236, 1243

(1976) ), and water, essential to life and livelihood, is per-

haps the most critically scarce resource of the region (Id. at

pp. 804, 1239). Furthermore, approximately half of all lands

in the Western United States are held by the United States

(United States v. New Mexico, 438 U.S. 696, 699, n. 3, 98

S.Ct. 3012, 3013, n. 3). When disputes arise, therefore, par-

ticularly disputes over water rights, it is virtually

impossible to avoid federal involvement and federal repre-

sentation of multiple interests. Since independent repre-

sentation of Indian tribes is a phenomenon of fairly recent

vintage, it is a near certainty that many or most long-

standing decrees and agreements involving Indian lands

and other federal property were the result of unitary fed-

eral representation.

Because of these facts, the Ninth Circuit’s ruling creates

the very real possibility that numerous property rights

which are federally derived will be subject to disruption

solely on the bases that (a) at some point in the past, the

government may have tried to avoid unnecessary litigation

concerning Indian title, or, unavoidably, may have litigated

multiple federal claims simultaneously; and (b) at some

point in the future, a government official may decide that

he disagrees with the claims made, strategy employed, or

legal position taken by his predecessors.

The Ninth Circuit’s decision merits consideration by this

Court because it thwarts the clear congressional policy of

encouraging comprehensive adjudication of water rights,

including federal water rights; it encourages unnecessary

litigation and relitigation of disputed claims; and it threat-

ens wholesale disruption of long-standing property rights

throughout the Western United States. The decision merits

reversal because it does not comport with the facts of the

case, it utterly disregards soundly established principles of

trust law, and it directly contravenes this Court’s develop-

ment of the doctrine of res judicata/collateral estoppel

and conflicts with decisions of five other Circuit Courts of

Appeals.

BASIS FOR JURISDICTION BELOW

The jurisdiction of the District Court was based on 28

U.S.C. § 1345.

ARGUMENT

I

THE DECISION OF THE NINTH CIRCUIT SUBVERTS

THE PRINCIPLES OF RES JUDICATA AND COL-

LATERAL ESTOPPEL ESTABLISHED BY THIS

COURT

In Montana v. United States, 440 U.S. 147, 99 S.Ct. 970,

(1979), decided two terms ago, this Court summarized the

principles of res judicata and collateral estoppel:

A fundamental precept of common-law adjudication,

embodied in the related doctrines of collateral estop-

pel and res judicata, is that a “right, question or fact

distinctly put in issue and directly determined by a

court of competent jurisdiction . . . cannot be disputed

in a subsequent suit between the same parties or their

privies [citation]. . . .” Under res judicata, a final

judgment on the merits bars further claims by parties

or their privies based on the same cause of action.

[Citations.] Under collateral estoppel, once an issue

is actually and necessarily determined by a court of

competent jurisdiction, that determination is conclu-

sive in subsequent suits based on a different cause of

action involving a party to the prior litigation. [Cita-

tions.] Application of both doctrines is central to the

purpose for which civil courts have been established,

the conclusive resolution of disputes within their juris-

dictions. (440 U.S. at 153, 99 S.Ct. at 973.)

Montana v. United States, supra, is only the most recent

of a decade-long line of cases commencing with Blonder-

Tongue Laboratories inc. v. University of Illinois Founda

tion, 402 U.S. 313, 91 S.Ct. 1434 (1971), which evidence this

10

Court’s commitment to the broadest possible application of

the res judicata/collateral estoppel bar. This Court has

progressively rejected the rigid technical constraints which,

prior to Blonder-Tongue, had historically limited the ap-

plication of res judicata and collateral estoppel.

Thus, in Blonder-Tongue Laboratories v. University of

Illinois, supra, the Court rejected the mechanical applica-

tion of the test of “mutuality of estoppel” as a requirement

for collateral estoppel. In Sea-Land Services Inc. v. Gaudet,

414 U.S. 573, 94 S.Ct. 806 (1974) the Court applied the

bar to non-parties who had been represented by a fiduciary

in the prior action. In Parklane Hosiery Co., Inc. v. Shore,

439 U.S. 322, 99 S.Ct. 645 (1979) the Court held that even

the “offensive” use of collateral estoppel was permissible.

And most recently, in Montana v. United States, 440 U.S.

147, 99 S.Ct. 970 (1979), this Court again extended the doc-

trine, applying it to a plaintiff which had been neither a

party nor represented by a party in the prior litigation

but which, because of its off-the-record control of the litiga-

tion, had had a full opportunity to litigate its claim.

Only where prosecution of the prior action was confined

by special, restrictive rules of evidence, procedure, and

appeal not applicable to the subsequent action, has this

Court refused to apply the res judicata/collateral estoppel

bar (See: Standefer v. United States, 447 U.S. 10, 100 S.Ct.

1999 (1980); but see: Allen v. McCurry, 449 U.S. 90, 101

S.Ct. 411 (1980) ).

It is plain that in the present action the United States

seeks to assert the same claim, a Winters doctrine claim

for a reserved water right for the Pyramid Lake Reser-

vation, that it asserted in the comprehensive Truckee River

adjudication which it commenced in 1913 and took to final

judgment in 1944. The District Court held, and we agree,

that a Winters doctrine right for a federal reservation

11

constitutes a single cause of action (App., p. 104).

Under Montana and its predecessors, then, the United

States is barred by res judicata/collateral estoppel from

relitigating the same claim in this case.“

The functional approach which this Court’s recent deci-

sions have utilized toward the issue of preclusion serves

a very beneficial purpose:

[P]reclud[ing] parties from contesting matters that

they have had a full and fair opportunity to liti-

gate protects their adversaries from the expense and

vexation attending multiple lawsuits, conserves judi-

cial resources, and fosters reliance on judicial action

by minimizing the possibility of inconsistent decisions.

(Montana v. United States, 440 U.S. 147, 153-154, 99

S.Ct. 970, 973-974 (1979).)

*Even if the Orr Ditch judgment afforded only issue preclusion

under the doctrine of collateral estoppel, rather than claim pre-

clusion, the United States would be barred because the issues in

this case are identical to those actually litigated in Orr Ditch.

The issues necessarily determined in the Orr Ditch case were

(1) the existence of a Winters doctrine right for the reservation,

(2) the date of priority of the right, and (3) the amount of the

right.

The issue raised in this litigation is precisely that litigated in

the prior action: The amount of water to which the Pyramid Lake

Reservation is entitled by virtue of the 1879 executive order setting

aside the Pyramid Lake Reservation for the benefit of the Indians.

The same facts are controlling, namely, the date the reservation

was established and the purpose for which it was established. Aud

the same “bundle of legal principles” is involved, to wit, that the

establishment of a federal reservation implies the reservation of

sufficient water rights to fulfill its purposes (Commissioner v.

Sunnen, 333 U.S. 591, 601-602, 68 S.Ct. 715, 721 (1948); Montana

v. United States, 440 U.S. 147, 156, 99 S.Ct. 970, 975-976 (1979);

T. J. Starker v. United States, 602 F.2d 1341 (9th Cir. 1979) ).

12

This Court has also noted that these very considerations

underlie the clear federal policy which encourages com-

prehensive adjudication of water rights in a single unified

proceeding, such as the Orr Ditch case (Colorado River

Water Conserv. Dist. v. United States, 424 U.S. 800, 819,

96 S.Ct. 1236, 1247 (1976)).

Recognizing the salutary purposes of the res judicata/

collateral estoppel doctrine, the Ninth Circuit held that the

defendants in Orr Ditch are entitled to rely on the finality

of the judgmeat and may properly raise it as a preclu-

sionary bar in this litigation. The court further held that,

since the Orr Ditch litigation was, as the government had

intended it to be, a “virtually comprehensive adjudication

that approximated a statutory im rem proceeding, and

avoided the defects associated with in personam water ad-

judications” (App., p. 49), it would be “manifestly unjust”

(id.) to permit the Orr Ditch defendants to rely on the

decree and not to permit subsequent appropriators to do

the same.*

As to TCID alone, however, the Ninth Circuit held that

because the adversity of the interests of the Newlands

Project and the Pyramid Lake Reservation had not been

“explicitly established, on the record, by pleadings” (App.,

p. 55) in the Orr Ditch case, the farmers on the Newlands

Project who currently hold the rights decreed to the United

States in Orr Ditch may not rely on the finality of that

decree to protect their water rights (App., p. 55).

In so holding, the Ninth Circuit has taken a giant leap

backwards from this Court’s increasingly substantive appli-

cation of the res judicata/collateral estoppel bar which

limit litigants to one full and fair opportunity to litigate

‘In so holding, of necessity the Ninth Circuit impliedly found

that the United States had been accorded a full, fair opportunity

to litigate its claim, and thus that due process was afforded.

13

their claims. By imposing the hypertechnical limitation of

“adversity on the pleadings” the Ninth Circuit has revital-

ized the archaic rule that form governs over substance. As

a consequence, this Nation’s already overburdened judicial

system faces the prospect of still more unnecessary liti-

gation and long-standing property rights which have been

the basis of a major agricultural economy throughout

Western Nevada and the seventeen Wesiern states can no

longer be relied upon.

The Ninth Cireuit's requirement of “adversity on the

pleadings” adds nothing to the due process safeguards al-

ready established by this Court. If a litigant has not had

a full and fair opportunity to litigate his claim in an ad-

versary context, the requirement of “adversity on the

pleadings” will afford him no protection not already guar-

anteed by this Court’s prior decisions. Conversely, if he

has had such an opportunity, the “adversity on the plead-

ings” requirement will serve only to accord him an un-

warranted second chance, and to inflict unnecessary ex-

pense on the defendants, burden on the judicial system,

and uncertainty on long established property and financial

interests.

THE DECISION BELOW CONFLICTS WITH DECI-

SIONS OF FIVE OTHER CIRCUIT COURTS OF

APPEALS

In addition to undermining the doctrine of res judicata/

collateral estoppel developed by this Court over the past

decade, the Ninth Circuit's requirement of formal “adver-

sity on the pleadings” is directly at variance with decisions

of the Third, Fourth, Fifth, Seventh, and Eighth Circuits.

Since at least 1940 decisions in these five circuits have

held that parties who were not so adverse could be barred

in later litigation between themselves.

14

In National Bondholders Corp. v. Seaboard C. Nat. Bank,

110 F.2d 138 (4th Cir. 1940) a mortgagor refinanced his

loan and attempted to discharge his preexisting debt

by delivering funds to a third party. When the third

party failed to deliver the funds to the trustee of the deed,

the lender of the refinancing loan sued the mortgagor

for repayment of that loan and also sued the trustee and

the guarantor of the original loan to clear title to the trust

deeded property. In the initial litigation the third party

was found to be the agent of the original trustee, rather

than the agent of the mortgagor, and the first promissory

note obligation was held to have been properly discharged.

In a subsequent lawsuit the guarantor of the first prom-

issory note sued the trustee thereof to recover the value of

that note. The trustee again attempted to claim that the

third party had not been its agent. The Fourth Circuit

Court of Appeals applied the doctrine of res judicata/col-

lateral estoppel against the trustee, despite its contention

that the doctrine was inapplicable due to the lack of adver-

sity between it and the guarantor in the first suit. On this

issue the court held:

.. . where some finding of fact is made in the first

suit which is an essential element in a claim or action

subsequently brought by one [co-party] against the

other. .. the judgment. . . is conclusive . . . in sub-

sequent litigation between them. (110 F.2d 138, 144.)

Thus, the finding in the first suit of an agency relation-

ship between the third party and the trustee was binding

on the trustee in the later litigation, even though the trus-

tee and the guarantor had not been adversaries, either on

the pleadings, on the record, or in fact.

The Fifth Circuit followed National Bondholders in

Livesay Industries, Inc. v. Livesay Window Co., 202 F.2d

378 (5th Cir. 1953). There, the parties had been co-plain-

15

tiffe in an action against a third party to declare the

validity of their then jointly held patent and to enjoin its

infringement. Because the patent’s validity had been an

essential element in the prior action and had ben upheld,

the Fifth Circuit held that the defendant could not chal-

lenge its validity in a second suit brought by its co-plaintiff

in the earlier action.

The Seventh Circuit followed the same rule in Diamond

Shamrock Corp. v. Lumbermens Mutual Casualty Co., 416

F.2d 707 (7th Cir. 1969). Therein Diamond, a casualty

sufferer, and Fireman’s its fire insurer, sued Lumbermens,

the underwriter of Diamond’s general liability policy which

covered risks other than fire. Lumbermens sought dis-

missal of Fireman’s on the ground that, because of the

lack of adversity between Fireman’s and Diamond, Fire-

man’s was not a proper party to the action since it would

not be barred by the judgment in any later action between

it and Diamond. In reversing the trial court’s dismissal

order, the Seventh Circuit held that:

. . It is likewise clear that the parties need not be

arrayed as adversaries in the prior litigation and that

formal issues need not be drawn between the parties

to apply the doctrine [of collateral estoppel]. (416

F.2d at 710.)

The leading and most often cited case rejecting formal

adversity on the pleadings as a requirement for res judi-

cata/collateral estoppel is Scooper-Dooper, Inc. v. Kraftco,

decided by the Court of Appeals for the Third Circuit in

1974 (494 F.2d 840 (3d Cir. 1974)). In an arbitration

proceeding Kraftco had been ordered to cease and desist

from violating a collective bargaining agreement wherein

it had agreed not to market in the Metropolitan New York

area products produced elsewhere. A federal district court

later enforced the arbitration decision in a declaratory

16

judgment action brought by Kraftco and Scooper-Dooper

challenging the collective bargaining agreement. The Dis-

trict Court upheld the agreement and ordered Kraftco to

stop selling products produced in Philadelphia to Scooper-

Dooper for resale in New York. Kraftco obeyed this order

and was thereafter sued by Scooper-Dooper, which again

challenged the validity of the collective bargaining agree-

ment. In affirming the lower court’s dismissal of the action

on the basis of collateral estoppel, the court held that:

.. „ [This Cireuit’s nullification of the mutuality

requirement renders non-adversity irrelevant to the

doctrine of collateral estoppel. In this Circuit, a total

stranger to a prior litigation may, in a subsequent

suit, estop a party from re-litigating a claim which he

lost in the prior controversy, provided that the initial

opportunity to present the claim was full and fair.

We see no reason to treat a co-plaintiff more harshly

than a total stranger. (494 F.2d 840, 845.)

Echoing the reasoning of the Third Circuit in Scooper-

Dooper, the Eighth Circuit has also abandoned “the re-

quirement of strict adversity”, which it recognized as “the

companion rule to ‘mutuality’.” (Oldham v. Pritchett, 599

F.2d 274 (8th Cir. 1979).)

The cases discussed above show the Circuit Courts’ clear

movement away from requirements of strict adversity in

res judicata/collateral estoppel cases. Indeed, other than

the Ninth Circuit’s decision below, we have found no deci-

sion since this Court decided Blonder-Tongue, in which

a circuit court has applied a test of “adversity on the plead-

ings” to prevent the application of res judicata/collateral

estoppel. In this matter, the Ninth Circuit stands alone,

and is so far from accepted principles of preclusion that

this Court should exercise its jurisdiction to reaffirm its

commitment to substance over form and to reiterate that

17

the sole test to be applied in these cases is whether the

party to be barred had a full, fair opportunity to litigate

its claim in the prior action.

THE DECISION OF THE NINTH CIRCUIT Ros.

TRATES THE IMPORTANT FEDERAL POLICY OF

PROMOTING CERTAINTY OF WATER RIGHTS

A. Western water right claims are comprised of two

elements: priority date and amount of entitlement

In the arid Western United States, the right to water is

generally acquired by applying it to a beneficial use. Be-

cause the supply of water is finite and frequently inade-

quate to meet all demands for its use, the doctrine of

“prior appropriation” has developed, by which a priority

is accorded each water user based upon the date his appro-

priation was initiated. He who is first in time is first in

right to the use of the water. The amount of the water

right is the amount the appropriator actually needs for

his use, up to the maximum which was put to beneficial

use within a reasonable time after the right was initiated.

Subsequent, or “junior”, appropriators can obtain rights

only to water which is surplus to the needs of all prior

appropriators. Thus, an upstream junior appropriator may

not be entitled to divert water flowing past his diversion

point if the flow is insufficient to satisfy the needs of all

downstream appropriators with earlier priority dates.

Similarly, federal reserved rights are characterized by

a priority and an amount of entitlement. They are different

only in that (1) the priority is based on the date the federal

reservation is established, rather than on the date water

use is first initiated, and (2) the amount of the right is the

amount reasonably necessary to fulfill the purposes for

which the reservation was established, rather than the

amount historically used.

18

Because of the inherently interdependent nature of water

rights and the need for certainty of water supply in

planning and pursuing virtually every human endeavor,

comprehensive streamwide water right adjudications are

a necessity. Indeed, as this Court has observed, Congress

enacted the McCarran Amendment (66 Stat. 560, 43 U.S.C.

§ 666) in order to promote such adjudications in place of

piecemeal and repetitive water right litigations attended

by the potential for inconsistent decrees (Colorado River

Water Conserv. District v. United States, 424 U.S. 800,

811, 96 S.Ct. 1236, 1247 (1976)).

B. The United States must assert multiple claims in com-

prehensive water right adjudications

The federal government itself needs reliability and

certainty in its water rights as much as private citizens do.

It must be able tu evaluate the adequacy of those rights

for its various purposes and to make long-range plans for

the exercise of its governmental functions with certainty.

To do this it must know with assurance what water rights

it can rely upon and whether those rights will provide

an adequate water supply for the purpose contemplated.’

To obtain the necessary certainty, the government must

adjudicate its water right claims in comprehensive water

rights litigation.

Such litigation necessarily implies the simultaneous

representation of multiple federal claims. As this Court

has noted, water is perhaps the most critically scarce

resource in the West and Southwest, and Indian water

19

rights are “ubiquitous” (Colorado River Water Conserv.

Dist. v. United States, 424 U.S. 800, 804, 811, 96 S.Ct. 1236,

1247 (1976)). In addition to lands held in trust for Indian

tribes, moreover, the federal government owns approxi-

mately half of all the lands in the western states (United

States v. New Mezico, 438 U.S. 696, 699, n. 3, 98 S.Ct. 3012,

3013, n. 3). It holds these lands for purposes ranging from

wildlife preservation to national defense, all of which re-

quire water for their fulfillment. The extent to which mul-

tiple water right claims must be simultaneously asserted

by the federal government cannot be precisely determined,

but even a cursory examination of recent cases illustrates

that comprehensive water right adjudication is impossible

to achieve without representation by the United States of

multiple claims which must, by definition, conflict.“

In Colorado River Water Conserv. District v. United States,

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govern-

lands and works” (373 U.S. 546, 595, 83 S.Ct. 1468, 1495

(1963) ).

In United States v. Alpine Land and Reservoir Co., 303 F Supp.

877 (D. Nev. 1980), now pending before the Ninth Circuit Court

20

©. Requiring strict “pleading adversity” of claims would

threaten privately held water rights on the Truckee

River and throughout the West

Were only internal federal interests and priorities im-

plicated in the decision below, this case might not ery out

so compellingly for review by this Court. But federal action

inevitably elicits private sector reliance.

A clear example of the interrelationship between govern-

mental action and private sector reliance is the Orr Ditch

case itself. It was precisely the need to ascertain water

availability for the Newlands Project which impelled the

government to seek adjudication of all prior water claims

on the Truckee, including its own. (App., pp. 6, 100.) The

Ninth Cireuit's decision below, by postulating a fictitious

non-adversity of water claims, has utterly destroyed the

of Appeals, the United States purports to represent the water

rights for the Toyiabe National Forest, Stillwater Wildlife Refuge,

and the Newlands Project, but has advanced arguments based

primarily on the interests of the Pyramid Lake Indian Reservation

located in a different but related watershed.

Even in the case at bench, the United States is simultaneously

pursuing claims on behalf of the Pyramid Lake Indian Reservation,

the Stillwater Wildlife Refuge, the Toyiabe National Forest, and

other federal purposes. (App., p. 16, 17.)

Whether the Ninth Circuit's decision would require separate

and independent representation of each adversely pleaded federal

claim is unclear. If not, nothing of substance would be accom-

plished by merely listing the claims separately and adversely on

the pleadings. If so, an army of federal lawyers would be required

for each water adjudication. Even then, however, it is highly ques-

tionable whether any additional quantum of “adversity” would be

achieved. Each water right claim of the federal government is

unique and has a unique identity composed of two elements:

every other water right claimant with a later priority, since every

prior right diminishes the water supply available to such claimants.

21

very certainty which it was the government’s primary pur-

pose in Orr Ditch to achieve. And, by stripping the New-

lands Project of its water rights, the decision below jeop-

ardizes the lives and investments of thousands of farm

families who built an agrarian society at the invitation of

the federal Reclamation Act and in reliance on the certainty

of judicially established federal water rights.

By permitting reduction of the Newlands Project

rights at this late date, the Ninth Circuit, in its decision

below, sanctions invasion not only of rights still held by

the United States, but also of rights now held by trans-

ferees of federal lands and water rights. Water rights on

a reclamation project are appurtenant to the land (43

U.S.C. 372) and are owned by the individual project

farmers (Ickes v. Fox, 300 U.S. 82, 95, 57 S.Ct. 412, 416-

417 (1937)). It is these farmers’ rights which the Ninth

Circuit has held may now be retrieved by the United States,

despite the fact that the District Court found that the

farmers were unaware of any impropriety in the govern-

ment's representation of the reservation. (App., pp. 103,

107).

The Newlands Project farmers paid valuable considera-

tion for their water rights, by purchasing and improving

the land, repaying the construction costs of the project, and

detrimentally relying on the certainty of those rights for

two generations. Retrieval of such rights at this point vio-

lates clearly established trust law principles which protect

a purchaser’s innocent reliance on a fiduciary’s good faith

dealings with his trust beneficiaries (See 4 Scott on Trusts,

§§ 283-285, pp. 47-51 (1967)). A purchaser’s innocent re-

liance is protected for the same policy reasons which under-

lie protection of a litigant’s innocent reliance on a fiduci-

ary's proper representation of his beneficiaries. No rational

purpose is served by the Ninth Circuit’s distinction between

innocent purchasers and innocent litigants.

As this Court observed, the interlocking and interde-

pendent nature of adjudicated water rights makes it in-

evitable that “‘any order or action affecting one right

affects all such rights.’” (Colorado River Water Conserv.

District v. United States, 424 U.S. 800, 811, 96 S.Ct. 1236,

1243 (1976) quoting S. Rept. No. 755, 82d Cong. Ist Sess.,

pp. 4-5 (1951) ). The Ninth Circuit transparently attempted

to craft its decision in such a way that only the decreed

rights of the Newlands Project could be invaded. But be-

cause of the interlocking nature of the rights involved, the

court’s attempt to insulate other water users from the

impact of its decision is bound to fail.

The water rights decreed to the federal government in

Orr Ditch are much greater than heretofore exercised by

the Tribe and TCID, and junior appropriators are utiliz-

ing the excess until TCID and Indian demands build up

to their maximum levels. Therefore, any future determi-

nation that the reservation is entitled to greater flows for

its fishery will result in an expanded exercise of the gov-

ernment’s Orr Ditch rights. Because the Truckee River is

already fully appropriated during most of the year, cor-

respondingly less water will be available for the junior

appropriators. Thus the subsequent appropriators, whom

the Ninth Circuit tried so pointedly to shelter from the

impact of its decision, will inevitably be deprived of water

nevertheless, as the Orr Ditch comprehensive decree is

unraveled.

D. Factual adversity between claims is inherent in a

comprehensive water right adjudication

This disruption of Western Nevada’s water-based econ-

omy is unnecessary, and unsupported by either law or

fact. A strict requirement of “adversity on the pleadings”

has never reflected the realities of comprehensive stream-

wide water right adjudications. In such actions, alignment

23

as plaintiff or defendant is irrelevant. Because the flow

of water is finite, every claim is adverse to every other

claim. As the Idaho Supreme Court explained, when ad-

dressing the issue of the adversity requirement:

[I]t matters but little who are plaintiffs and who are

defendants in the settlement of cases of this charac-

ter; the real issue being who is first in right to the

use of the waters in dispute. (Morgan v. Udy, 79 P.2d

295, 299 (Idaho 1938).)

If all claims in actions such as Orr Ditch are indeed

adverse regardless of the parties’ arrangement on the

pleadings, one would expect to find in the record of Orr

Ditch that both the priority and the amount of the water

right claim asserted on behalf of the Pyramid Lake

Reservation were in fact separately litigated in an ad-

versary context between the government and non-govern-

mental junior appropriators. In fact, the record shows this

to have been the case. Throughout the litigation, and up

to the entry of the final decree, the private defendants

in Orr Ditch vigorously opposed both the priority date and

the amount of water claimed by the government for the

Pyramid Lake Reservation. (See Exhibits B-480, B-481,

B-482, B-483, B-484, B-485, B-486, B-488, B-489, B-490,

B-491, B-515.)

Thus, in Orr Ditch, as in every comprehensive water

adjudication, the requisite adversity was established in-

herently by the nature of the claims made, rather than by

the identity of the claimants or their arrangement on the

pleadings. Factual adversity of claims is inherently and

sharply present, was present in Orr Ditch, and is sufficient

(Chicago, N. I. & P. Ry. Co. v. Schendel, 270 U.S. 611, 46

S.Ct. 420 (1926)).

The strong federal policies of encouraging comprehen-

sive water right adjudications (Colorado River Water

24

Conserv. Dist. v. United States, 424 U.S. 800, 96 S.Ct.

1236 (1976)), obtaining finality of judgments in property

rights litigation (United States v. Title Insurance and

Trust Co., 265 U.S. 472, 44 S.Ct. 621 (1924)), and promot-

ing judicial economy while protecting due process rights

(Montana v. United States, 440 U.S. 147, 99 S.Ct. 970

(1979) ), will be severely undermined if the Ninth Circuit’s

decision is allowed to stand.

Iv

THE NINTH CIRCUIT MISAPPLIES THIS COURT'S

RULINGS IN HOLDING THAT THE SECRETARY

OF THE INTERIOR WAS NOT AUTHORIZED TO

NEGOTIATE AND EXECUTE AN OUT OF COURT

SETTLEMENT OF DISPUTED INDIAN WATER

RIGHTS

The Orr Ditch Final Decree, which TCID asserts as a

preclusionary bar to the instant litigation, was a consent

decree. It incorporated verbatim the provisions of the

Truckee River Agreement settling the water rights of the

various parties to the Orr Ditch litigation. (App. 102, 159-

160, 231-233, 245.) The Truckee River Agreement was exe-

cuted by the United States, TCID, and other major water

users after extended negotiations during which TCID was

independently represented. The Reclamation Service took

no position, and the United States actively negotiated only

on behalf of the Indians. In fact, the United States suc-

ceeded in obtaining agreement that the Pyramid Lake

Reservation water right could be based on more reserva-

tion lands and a higher applied water duty than had been

previously determined by the Special Master. (See Exhibits

B-291, U-273, U-277, A-467, G-29, B-316, U-293, U-294,

U-296, B-332, B-337, B-339, B-345, B-349.)

Because the Truckee River Agreement has vitality inde-

pendent of the force of the Orr Ditch Final Decree, the

25

Ninth Circuit found it necessary to separately disable it.

In footnote 10 of its decision, the Ninth Circuit states:

10. The district court did not rest its holding

directly on 25 U.S.C. §§2 and 9. However, the de-

fendants urge that two cases interpreting those sec-

tions, United States v. Ahtanum Irr. Dist., 236 F. 2d

321 (9th Cir. 1956), cert. denied, 352 U.S. 988, 77 S.Ct.

386, 1 L.Ed.2d 367 (1957) (Ahtanum I), and 330 F.2d

897 (9th Cir. 1964), cert. denied, 381 U.S. 924, 85 S.Ct.

1558, 14 L.Ed.2d 683 (1965) (Ahtanum II), provide

alternative authority for the Secretary to extinguish

Indian waters.

Even if we agreed that the Ahtanum cases could be

extended by analogy to this case, those cases have been

modified by Organized Viliage of Kake v. Egan, 369

U.S. 60, 82 S. Ct. 562, 7 L.Ed.2d 573 (1962), which was

decided after Ahtanum I and before Ahtanum II.

Under Kake, agreements between the government and

non-Indians to alienate Indian property can only be

valid if they are needed “to implement specific laws”

other than 25 U.S.C. 5 2 and 9. To be valid, then,

the Secretary’s conduct in Orr Ditch must find its

basic authority elsewhere. (App., p. 29, n. 10)

In United States v. Ahtanum Irr. Dist., 236 F.2d 321

(9th Cir. 1956), the Ninth Circuit squarely held that the

Secretary of the Interior had authority, under statutes em-

powering him to manage Indian affairs and all matters

arising out of Indian relations (25 U.S.C. §§ 2, 9), to effect

an out of court settlement of disputed Indian property

rights. Ahtanum Creek bordered a treaty reservation and

disputes arose between non-Indian settlers and the Indians

as to the proper apportionment of the waters of the creek.

In 1906, a non-Indian filed suit against a government agent

concerning distribution of the creek’s waters. As a result

of the litigation the Superintendent of Indian Affairs was

“directed to see if an adjustment of the rights to use of the

water could be made out of court” (236 F.2d at 329). In

1908, such an agreement was signed by the United States

providing for twenty-five percent of the creek’s flow to be

allocated to the Indians and seventy-five percent to their

non-Indian neighbors.

Thereafter the United States sued the non-Indian di-

verters of Ahtanum Creek for an adjudication of the

Indians’ water rights. The District Court dismissed the

complaint, holding that the prior agreement barred the

United States from claiming more than the twenty-five

percent of the flow which had been guaranteed the Indians.

The Ninth Circuit was faced squarely with the pre-

cise question it faces again in the instant litigation: Was

the Secretary authorized to enter into such an out of court

settlement? The Court held that he was, and found the

agreement valid. It cited 25 U.S.C. § 2 and reasoned:

It is fair to say that in conferring these powers

upon the Secretary of the Interior Congress must

have had it in mind that a part of the Secretary’s

task of supervision and of management of Indian

affairs would necessarily deal with certain relations

between the Indians on the one hand and their white

neighbors on the other. The management of any parcel

of land necessarily involves some degree of occasional

adjustment of the rights of the owner in relation to

and concerning adjoining landowners; arrangements

for the location and erection of boundary fences, and

repair and maintenance of those fences are illustra-

tions of this. More specifically we have here the case

of a stream which formed the boundary between the

Indian reservation and the outside public lands, and

which public lands were open to entry by white settlers.

27

The rights of the white settlers to the use of the

waters were subordinate to the rights of the Indians,

but they were not nonexistent. ... Where the waters

of a stream are subject to use by different landowners,

the very use itself involves some accommodation

between the parties. It is common knowledge that,

particularly in the early days, many streams in the

West were used by appropriators or by riparian own-

ers long before the stream rights had been adjudicated,

and prior to the establishment of any machinery for

the appointment of water masters. That sort of thing

involves a measure of dealing between water users.

Authority to manage property would normally com-

prehend dealings of this character.

At the time the 1908 agreement was made, disputes

had begun to appear as to the proper division and

distribution of the waters of Ahtanum Creek. Of

course it was then open to the United States, although

not to the white landowners, to start court proceedings

designed to adjudicate the rights of the litigants. It

is the view of this court that it could not have been

within the contemplation of Congress that the Sec-

retary, vested as he was with the general power of

supervision and management of Indian affairs, and of

matters arising out of Indian relations, could not make

a peaceful arrangement for a practical mode of use

of the waters of this stream. (236 F.2d at 335, 336.)

Under the holding of Ahtanum, the Truckee River

Agreement is clearly valid and binding on the United

States, regardle of the effect of the Orr D ch Final

Decgee. The Ninth Circuit now repudiates its Ahtanum

holding, but does so by completely misinterpreting this

Court’s decision in Organized Village of Kake v. Egan,

369 U.S. 60, 82 S.Ct. 562 (1962). According to the Ninth

Circuit, Take holds that Secretarial action is valid under

25 U.S.C. § 2 and 99 only if necessary to implement other

specific laws. Since no specific statute can be pointed to

which expressly empowers the Secretary to compromise

disputes involving Indian trust lands, the court reasons,

the Secretary is not authorized to do so.

This interpretation of Kake is nothing short of amazing.

Kake had nothing to do with management authority over

trust property. It involved the interrelationship between

State and federal jurisdiction over Indian activities.

In Kake, the issue was whether the Secretary had the

authority to permit Indians to operate fish traps in navi-

gable waters in contravention of State conservation laws.

This Court held that Congress had neither granted the

Indians immunity from State conservation laws while fish-

ing on non-reservation lands, nor authorized the Secretary

to do so.

In the discussion of this dispute over State jurisdiction,

the Court referred to arguments made by the Secretary

based on 25 U.S.C. §§ 2 and 9:

In keeping with the policy of almost total tribal self-

government prevailing when these statutes were

passed, see 369 U.S., pp. 71-72, 82 S.Ct., p. 569, infra,

the Interior Department itself is of the opinion that

the sole authority conferred by the first of these [25

U.S. C. § 2] is that to implement specific laws, and by

the second [25 U.S.C. 49] that over relations between

the United States and the Indians—not a general

power to make rules governing Indian conduct.

United States Department of the Interior, Federal

Indian Law (1958), pp. 54-55; Cohen, Handbook of

Federal Indian Law (1945), p. 102. We agree that

they do not support the fish-trap regulations.

(369 U.S. at 63, 82 S.Ct. at 564)

It is this language which the Ninth Circuit has trans-

formed into a holding governing the management of Indian

trust property. But such a far-reaching extension of Kake

would strip the Secretary of authority to deal with and

manage that property at all. Non-judicial dispute resolution

is a necessary part of property management and of Indian

relations. Adjustment of disputed rights is not the equiva-

lent of “alienation” of Indian property, as the Ninth

Cireuit suggests. (App., p. 29, n. 10.) Where rights are un-

certain and disputed, and mutual agreement can be reached,

the adjustment may amount, as readily as not, to “acqui-

sition” as to “alienation.” Finally, where mutually accept-

able arrangements can be made settling property disputes

and providing a foundation for future neighborly relations

between Indians and non-Indians, no reason appears why

searce judicial, financial, and human resources must be

expended before the dispute can be effectively resolved.

The Ninth Cireuit's opinion curtailing the scope of the

Secretary’s management powers unsettles, to an unknow-

able degree, established property interests which have

been relied upon for generations. Because of this impact,

and because it drastically limits the executive’s manage-

ment authority to deal with trust property in the future,

this Court should accept this case to more fully describe

the management authority vested in the Secretary of the

Interior. Only with such clarification can the effectiveness

of the Secretary's decisions be relied upon in future years

and the validity of property interests founded upon his

actions in past years be ascertained.

Vv

CONCLUSION

As shown by the foregoing discussion, the decision of

the Ninth Circuit Court of Appeals in this case contradicts

the principles of res judicata/collateral estoppel developed

by this Court, directly conflicts with decisions of at least

five other Circuit Courts of Appeals, and threatens the live-

lihood of thousands of reclamation project farmers and

holders of other federally derived rights throughout the

seventeen Western United States. The decision also mis-

applies a prior decision of this Court and so far extends

it that it destroys the Secretary of the Interior’s power

to avoid unnecessary litigation through negotiated com-

promises of disputed rights in Indian trust property. As a

result of the decision below, settled property interests

throughout the West are needlessly exposed to disruption

and challenge.

Because these reasons are special and important, peti-

tioner respectfully requests that a writ of certiorari issue

from this Court as prayed.

Dated: June 9, 1982.

Respectfully submitted,

Jounsow & Apams, Lrp.

James W. Jonxsox, Jr.

Knoxick, Mosxovrrz,

Trepemann & Gnu

A Professional Corporation

Freperick G. Grrarp

Cuirrorp W. Scnurz

Janet K. Gotlbsurrn

COUNSEL OF RECORD

Attorneys for Truckee-Carson

Irrigation District