Appendix — Truckee-Carson Irrigation District v. United States

812276

No.

In the Supreme

OF THE —

United States

Octoser Term 1981

Truckee-Carson Irrication District,

Petitioner,

vs.

Unrrep States or America and

Pyramw Lake Patute Tank or IxDlaxs,

Respondents.

APPENDIX TO PETITION FOR

WRIT OF CERTIORARI

Jonxsox & Apams, Lp.

James W. Jounson, Jr.

111 California Avenue

Reno, Nevada 89509

Telephone (702) 323-8616

Knoxick, Moskovitz,

Trepemann & Gmb

A Professional Corporation

Freperick G. Grrarp

Currorp W. Scuviz

Janet K. Goipsmiru

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 94103 * (415) 864-2300

INDEX

Prge

Appendix A—[649 F. 2d 1286] Opinion of the United

States Court of Appeals for the Ninth Circuit ... A-1

Appendix C—Order of January 5, 1982, =

Published Decision A-66

Appendix D—Order of March 11, 1982, Denying Re-

— A-70

Appendix E—Memorandum Decision of United

States District Court, D. Nevada, December 12,

1979 * , A-72

Appendix F—Findings of Fact and Conclusions of

Law of the United States District Court, D. Ne-

vada, December 12, 1977 A-94

Appendix G—Truckee River Agreement, June 13,

1935 A-110

Appendix H—Final Decree in United States v. Orr

Water Ditch Co., September 8, 1944; pp. 1-12,

86-87 7 A-185

Appendix A

United States of America,

Plaintiff-Appellant,

and

Pyramid Lake Paiute Tribe of Indians,

Plaintiff-Intervenor-Appellant,

V.

Truel e-Carson Irrigation District, State of Nevada,

Sierra Pacific Power Company, City of Reno,

City of Sparks, County of Washoe, and

Washoe County Treasurer, Trustee, Albert A. Alcorn

and Approximately 17,000 Other Individually

Named Persons, Firms, Partnerships, and Corporations,

Defendants-A ppellees.

Nos. 78-1115, 78-1493.

United States Court of Appeals,

Ninth Circuit.

Argued and Submitted April 15, 1980.

Decided June 15, 1981.

As Modified July 10, 1981.

Before TUTTLE,** SKOPIL, and SCHROEDER, Cir-

cuit Judges.

SKOPIL, Circuit Judge:

**Senior Circuit Judge, U. S. Court of Appeals, Fifth Circuit,

sitting by designation.

A-2

This action is brought by the United States and the

Pyramid Lake Paiute Tribe to quiet title to a water right

to sustain the Pyramid Lake fishery. The question raised

in this appeal is whether an equitable water adjudication

filed by the government in 1913 and finalized in 1944 pre-

cludes this cause of action.

In 1913 the United States filed in the U.S. District Court

in Nevada an equitable action, United States v. Orr Water

Ditch Co., et al., Equity No. 3, naming as defendants vir-

tually all water users on the Truckee River in Nevada. The

government sought a decree quieting title to the water

rights of all users of Truckee River water. As plaintiff,

the government purported to represent two interests: the

Newlands Reclamation Project, which required an appro-

priation of water for irrigation purposes; and the Pyramid

Lake Indian Reservation, which was alleged to have a fed-

erally reserved water right. The proceedings terminated

in 1944 with the filing of a final decree. The Reclamation

Project’s water right has enabled it to divert most of the

flow of the Truckee River before it reaches Pyramid Lake.

The Reservation’s water rights were limited to a small

quantity of irrigation water. The government did not assert

a claim for water to sustain the Pyramid Lake fishery.

In 1973 the United States instituted this action on behalf

of the Pyramid Lake Paiute Tribe. The complaint sought

a deevee quieting title to a reserved water right to fulfill

the purposes of the Pyramid Lake Reservation, including

the maintenance of the level of Pyramid Lake and the

lower reaches of the Truckee River for fishery purposes.

A-3

In 1974 the Tribe intervened as a party plaintiff, asserting

the same right.

After an extensive trial, the district court held that the

1944 final decree in the Orr Ditch case precluded the cause

of action asserted here. The district court dismissed the

government’s claim for a reserved water right for the

Reservation for fishery purposes. The district court dis-

missed the Tribe’s complaint in intervention in its entirety.

We affirm that portion of the district court’s order giving

preclusive effect to the Orr Ditch decree as to most of the

defendants. We reverse that portion of the order dis-

missing the complaint as to the Truckee-Carson Irrigation

District.

FACTS AND PROCEDURAL HISTORY

1. The Pyramid Lake Reservation

In 1844 John C. Fremont came across Pyramid Lake

and the Indians inhabiting its shores. The Lake was “set

like a gem in the mountains” and “broke upon [their] eyes

like an ocean”. It was about 50 miles long and 12 miles

wide, considerably larger than its sister, Lake Tahoe. The

Indians brought in fish to trade with the whites. The fish

“were of extraordinary size—about as large as the

Columbia River Salmon—generally from two to four

feet in length. . they doubtless formed the subsist-

ence of these people, who hold the fishery in exclusive

3 ”

possession ....

The Expeditions of John Charles Fremont 609 (1970).

In 1859 the Secretary of the Interior directed that a

322,000 acre reservation be set aside, consisting of Pyramid

Lake (“the Lake”), the lands surrounding it, and the lower

reaches of the Truckee River, which feeds the Lake. In

A4

1874 President Grant signed an executive order confirming

the reservation. As the district court found, one of the

purposes of establishing the reservation was to enable the

Tribe to take advantage of the Pyramid Lake fishery, then

consisting of a native species of cut-throat trout, and the

cui-ui which exist nowhere else. Under the supervision

of the Department of Interior’s Indian Service, the Indians

began irrigating reservation land. By 1890, about 1,000

acres were irrigated. This had increased to 1,200 acres in

1913.

2. The Reclamation Project

In 1902 Congress passed the Reclamation Act, permitting

the Secretary to withdraw from entry arid public lands

and to initiate irrigation projects to reclaim them. Fifteen

days after the Act was passed, the Secretary withdrew

land for what became known as the Newlands Reclamation

Project (“the Project”) in western Nevada. The Project

contemplated the irrigation of about 200,000 acres. It was

designed to draw water from two rivers, the Carson and

the Truckee, which originate in the Sierra Nevada Moun-

tains. In its natural state, the Carson River, after reaching

the Nevada desert, is lost in a vast sink. The Truckee runs

from the Sierra Nevadas to Lake Tahoe, spills into eastern

California, then into Nevada, and ends in Pyramid Lake.

The Project would divert water from the Truckee River

into the Lahontan Reservoir on the Carson River, which

lies outside the Truckee River watershed. There the water

would be stored for Project use. Many miles of irrigation

works would transport the water to reclamation sites.

A-5

After land was withdrawn for the Project, the govern-

ment posted notices claiming the right to all unappropri-

ated water in the Truckee, and making a specific claim to

the use of 1,500 cubic feet of water per second. Construc-

tion then began on Derby Dam, and on a large canal to

divert water from the Truckee into the Lahontan Reservoir.

In 1904 Congress authorized the Secretary to include

within the Project irrigable land located on the Pyramid

Lake Reservation (“the Reservation”). A portion of that

land was to be allotted to the Indians in 5-acre allotments.

About 20,000 reservation acres were thought to be irri-

gable. Because there were relatively few Indians on the

reservation, a large land surplus was anticipated. These

surplus irrigable lands were to be sold to settlers, the pro-

ceeds to be used for the Indians’ benefit.

3. The Orr Ditch Proceeding

Prior to the Project’s initiation, a number of private

landowners, land and water companies, and power generat-

ing companies had established rights in the Truckee. There

were about 40,000 irrigated acres in the Reno Valley alone,

owned by about 100 separate parties. Much of the water

being diverted in the Reno Valley was being wastefully

used, and there was “no practical way for the government

to confine this very extensive up-river use within proper

bounds.” Further, the Pyramid Lake Reservation was

believed to have a reserved water right with a very early

priority date under the Winters doctrine. Winters v. United

States, 207 U.S. 564, 28 S.Ct. 207, 52 L.Ed. 340 (1908),

af g, 143 F. 740 (9th Cir. 1906). Only after water rights

A-6

were adjudicated could the government know how much

water it could divert. In times of scarcity the government

could enforce restrictions on other users.

Nevada law offered a cheap and expeditious method for

adjudicating water rights, under the auspices of the State

Engineer. However, because the government expected to

assert “difficult and intricate legal” theories, it was thought

better to bring an equitable quiet title action in federal

court. On August 21, 1912, the Attorney General authorized

a suit to be initiated. The complaint in United States v.

Orr Water Ditch Co., et al. was filed on March 3, 1913. The

complaint asserted a claim to 10,000 cubic feet of water per

second for the Project, and 500 cubic feet per second for

the Reservation. The complaint sought to name as defen-

dants all water users on the Truckee River in Nevada. It

prayed for a decree quieting title to the rights of all

parties.

With respect to the claim for the Reservation, the com-

plaint was drafted broadly to permit the government to

assert “the fullest sort of reserved rights for this reser-

vation.” John F. Truesdell, the Special Assistant U.S.

Attorney who drafted the complaint, recognized that the

Reservation rights were uncertain. At the very least, the

Reservation was entitled to an appropriation right based

on the Indians’ historic use, even assuming the Winters

reserved rights doctrine did not apply to executive order

reservations. If a Winters right was available, its extent

was uncertain. The reservation might be entitled to suffi-

cient water for all irrigable Reservation acreage. Alter-

natively,

A-7

„lit might be held that the reservation of waters was

limited to the fullest amount of water that could be

used by the Indians for which the reservation was

made and their reasonable increase, when living on

allotments such as it has been the custom of the gov-

ernment to make

Ex. U-10 at 8. The circumstances surrounding the estab-

lishment of the Reservation “would have an important

bearing upon this question.” Truesdell came to the conclu-

sion that Winters rights ought to exist for executive order

reservations, under the reasoning of Conrad Investment

Co. v. United States, 161 F. 829 (9th Cir. 1908), aff’g, 156

F. 123 (C.C.D.Mont.1907). It was essential to include them

in the adjudication: “[T]hese Indian reservation water

rights are important and should be established to the fullest

extent because they are senior and superior to most if not

all the other rights on the river.”

After filing the complaint, the government initiated ex-

tensive surveys of the land and ditches of all claimants.

Much of this work was done by government agents, and

some by engineers employed by the defendants. The parties

shared the survey information. It was more than six years

after the complaint was filed that the case reached an

evidentiary hearing. During that time, the government’s

claims for the Reservation took shape. The 1904 Act

(authorizing 5-acre Indian allotments, and sale of surplus

irrigable land) was a dominant consideration. Two general

categories of reservation lands were thought to be irriga-

ble: about 19,00 acres of bench lands, and about 2,400

acres of ‘‘delta’’ or bottom lands lying along the Truckee.

The 2,400 acres of bottom lands were already “to a very

A-8

considerable extent being farmed by the Indians and they

also embrace the agency and school property.” Under the

authority of the 1904 Act, the Reclamation Service planned

to include in the Project the 19,000 acres of bench lands.

Under the 1904 Act it was

“of course clear that each Indian belonging on the

reservation is to have five acres of this land. It also

seems clear that under the doctrine of the Winters

case the original Indian withdrawn water right would

attach to each of these five acres that the Indians are

to have, but the rest of the 19,000 acres which will be

irrigated by the works of the project will have to

depend for their water right upon the general project

water right.”

Ex. U-88 at 2.

The claim was discussed with officials in the Indian

Service. The government decided to press a claim for water

sufficient to irrigate about 5,400 acres: 3,000 acres of bench

lands (to account for 600 5-acre allotments) and 2,400 acres

of delta lands. With minor changes, this was the claim

asserted at the evidentiary hearing and in the government’s

post-hearing briefs.

Truesdel! saw no conflict between the needs of the Reser-

vation and the needs of the Project:

[Wie have always had it in mind that there could be

no conflict of interest between the Reclamation project

and the Indian Reservation as to the irrigation of

these 2,400 acres of delta lands, because these lands

are the last on the river and we have thought that

return flow from irrigation below the headgate of the

single canal that serves all of the Reclamation Project

lands would be ample to irrigate these Indian lands

A-9

so that never would the Reclamation Project have to

refrain from diverting water in order to satisfy the

Indians’ earlier priority.”

Id. at 4.

The evidentiary hearing, conducted mainly by a Special

Master, began in 1919 and lasted until 1921. Arguments

were heard in September 1922. In July 1924, the Special

Master issued his report and proposed decree. He agreed

that there should be no conflict between the water needs of

the Reservation’s “meager” allotments and the needs of

other users.

The Master recommended that a temporary restraining

order be entered declaring the parties’ water rights for a

trial period. District Judge Farrington accepted the report

and on February 13, 1926, signed a temporary restraining

order. The order awarded the Reservation an 1859 priority

date for water for 3,130 acres of delta or bottom lands.

If 5-acre allotments of bench lands were made under the

1904 Act, the reservation would be entitled to additional

water for those lands. For the Project, the government

was to have a 1902 priority date for 1,500 cubic feet per

second flow for the irrigation of 232,800 acres."

On December 18, 1926, the government and the Truckee-

Carson Irrigation District (TCID) signed a contract under

which the latter was to operate the Project.

‘It was recognized, notwithstanding this priority, that there would

be insufficient water to irrigate the Project’s entire 232,800 acres. In

fact, there has never been irrigated more than about 65,000 acres

of land in the Project.

A-10

4. The Decline of the Fishery

Pyramid Lake’s fishery continued to be productive

through the first part of the century. Around the time of the

Orr Ditch evidentiary hearing, however, the Project’s di-

version of “almost the whole volume of the Truckee River”

into another watershed, began to tell. The level of the Lake

began to drop. This, in combination with refuse from up-

stream sawmills, built up a delta at the mouth of the

Truckee. In 1921 Lorenzo Creel, a Special Supervisor in

the Indian Service, had to arrange a special spill of water

from Derby Dam to enable the Lake’s trout to pass the

delta. Without the additional water, the fish were unable

to reach their upstream spawning grounds.

In 1922 Creel pronounced the fishery “doomed” unless

an adequate flow of water could be assured. In January

1922, feeling that the fishery’s needs had been overlooked,

Creel suggested to the Commissioner of Indian Affairs

and to Reno Agency officials that water for the fishery

could be sought in the Orr Ditch case:

“T have accumulated a great deal of material for

this report, and in studying over the situation it is

clear that the intent of the government, when the Pyra-

mid Lake reservation was established, was to include

Pyramid Lake for the use and benefit of the Paiute

Indians. The only benefit to be derived therefrom ap-

parently is the Pyramid Lake trout.

“Now, if this view be the correct one, have not the

Indians a prior right to sufficient water from the

Truckee River to enable those trout to reach their

natural spawning beds, in order that they may repro-

duce themselves? This question is so vital that I wish

A-¹¹

to recommend that it be taken up at once; and prob-

ably Mr. Truesdell and Mr. Withers, who are defend-

ing the right of the Indians to water for irrigation

purposes, may so amend their brief on behalf of the

Indians that this additional water right may be

claimed for them, and thus save a separate action, with

more prompt results.”

Ex. U-101 at 3.

If the Project’s requirements were deemed “paramount

to the value of the lake to the Indians”, Creel suggested

that the Indians should be awarded compensation. Super-

visor Wilson, in charge of the Indian Service’s Reno

Agency, echoed Creel’s suggestion in correspondence to

the Acting Commissioner of Indian Affairs. The Acting

Commissioner responded that his office was

“disposed to do everything it can to protect the fish,

not only for the benefit of the Indians, but of the

white population as well, so far as consistent with

the larger interests involved in the proposition, having

to do with the reclamation of thousands of acres of

arid and now useless land for the benefit of the coun-

try as a whole.”

Ex. U-113 at 2-3.

Members of the Tribe and others continued to point out

the need for water for the fishery. The government’s re-

sponses varied. In January 1925 a delegation of tribal

members met with the Indian Service Agency Supervisor

in Reno. The Supervisor sent a copy of minutes of the

meeting to the Commissioner of Indian Affairs. A response

came from the Commissioner of Reclamation, saying that

his Bureau would “carefully guard against taking any ac-

A-12

tion which would impair the right of the Indians” to water

for fishing. In the same year, Representative Raker of Cali-

fornia wrote to the Attorney General asking about the

status of the Orr Ditch case. The Assistant Attorney Gen-

eral in turn wrote Ethelbert Ward, the attorney then han-

dling the case, stating his understanding that the fishing

rights of the Indians were not involved in the Orr Ditch

litigation, but asking confirmation.

“[Congressman Raker] seems particularly inter-

ested in that aspect of the suit connected with the

Pyramid Lake Indian Reservation and the rights of

the Indians, and also in the preservation of the

Truckee River as a fishing stream. Apparently some

action is contemplated looking to legislation requiring

installation of means for facilitating the passing of fish

over the dams, ete. He inquired especially whether the

adjudication suit involved any questions, or has

brought out any information, concerning the fishing

rights of the Indians. I assume, of course, that noth-

ing of the kind is involved, but would like a direct

statement from you concerning it.”

Ex. U-23. Ward replied:

“You will see from the bill of complaint that nothing

is said about fish or water to be used for fish passing

up and down the stream. Nothing appeared about this

subject in any pleadings, nor was any testimony taken

or any suggestions made from the beginning of the

case down to the present time regarding fish.

“Inasmuch as the Government has control of the

Derby Dam, I have always thought that the Reclama-

tion Service and the Indian Service, both bureaus of

the Department of the Interior, could settle the matter

between them as to providing the proper fishways and

A-13

the comparatively small amount of water which may be

needed to enable the fish to pass up the fishways.”

Ex. U-24. Congressman Richards of Nevada also wrote to

the Commissioner of Indian Affairs. Commissioner Burke

responded :

“We fully realize the value and importance of the

fish, not only to the Indians but also to the people of

that section of the country generally and will do every-

thing that is possible for the preservation of this in-

dustry so far as is in our jurisdiction and within the

limitation imposed by available funds.

Ex. U-152. In 1926 the Commissioner of Indian Affairs

advised the Indians to resign themselves to the loss of

water for the fishery, which would “be used practically as

far as it can be for irrigation.”

A severe drought (1929-34), combined with the Project’s

diversions, and other factors, pushed the fishery further

toward extinction. In a 1935 letter to the Commissioner of

Indian Affairs, Reno Agency Indian Service officials de-

scribed the

“tragic situation which results from the drying up of

the Truckee River through diversion of practically all

of its water for irrigation purposes. You have assured

us and our own understanding of the situation per-

suades us against our will that it will be practically

impossible at this late date to obtain any assured flow

of water from the Truckee River into the Lake. The

time for that was when the original Truckee River

water rights were being adjudicated.”

Ex. A-506.

Between 1920 and 1938, the level of the Lake dropped

some 40 feet; its surface area was reduced by about 20,000

A-14

acres. By the early 1940's the strain of cut-throat trout

indigenous to the Lake was extinct. The cui-ui just sur-

vived. Beginning in 1941 efforts began to restore the fishery

with a dam and fishway. In the later 1940’s Nevada began

stocking the Lake. The success of this effort led to the en-

aetment in 1956 of the Washoe Project Act. Section 4 of

that Act declared that “restoration of the Pyramid Lake

trout fishery to its full potential value is deemed to be of

national interest and importance”. Several Lahontan cut-

throat trout hatcheries now augment the Lake’s fishery. A

small, experimental cui-ui hatchery is operating on the

Reservation. In 1976 the Marble Bluff Dam and Fishway

were completed, enabling the fish to bypass the delta in

transit to their spawning grounds. Releases from Stam-

pede Reservoir, completed in 1970, have helped provide

flows needed for the fishway. See Pyramid Lake Tribe v.

Morton, 354 F.Supp. 252 (D.D.C.1973).

As the district court in the instant case observed, these

restoration efforts “appear to justify optimism for even-

tual success.” Nevertheless, the level of the lake has con-

tinued to drop since 1940. The cui-ui is classified under

federal law as an “endangered species”, the Lahontan cut-

throat as a “threatened species”, under 15 C.F.R. $17.11

at 87-88 (1977).

5. The Truckee River Agreement and the Final Orr Ditch

Decree

In the mid-1930’s the principal organizational defendants

in the Orr Ditch case (Washoe County Water Conserva-

tion District, and the Sierra Pacific Power Co.) and TCID,

proposed an agreement among all parties. The proposed

A-15

agreement conformed to the temporary Orr Ditch decree.

The parties proposed to stipulate to a final decree, con-

tingent on the construction of additional upstream storage

at Boca Reservoir.

Ethelbert Ward raised an objection. The temporary de-

cree assumed that only about 3,000 acres of the 19,000 acres

of irrigabie reservation bench lands would be in Indian

ownership. This was based on the assumption that the 1904

Act, authorizing 5-acre Indian allotments and sale of the

surplus would be carried out. On May 9, 1934 Ward noted

that Congress was considering the Wheeler-Howard Bill,

which would prohibit further allotments. The Pyramid

Lake Reservation lands had never been allotted, and it

now appeared they never would be. Accordingly, Ward

suggested that the government seek a reserved right for all

19,000 acres of irrigable Reservation bench lands. The Bu-

reau of Indian Affairs looked into this possibility but

rejected it because of its “doubtful feasibility from all

standpoints, including that of water supply. .. . Sev-

eral other features of the proposed agreement were de-

bated within the Interior Department. The Department

negotiated an increased duty of water for acreage included

in the Reservation claims. The Reservation’s claim was

limited to 3,130 acres of bottom land and 2,745 acres of

bench land. The agreement was signed on July 1, 1935. A

stipulation for entry of a final decree was executed one

and one-half years later. In April 1942, after completion

of Boca Reservoir, the Orr Ditch decree was filed. In Sep-

tember 1944, hearings on entry of the final decree were

held. The decree was entered on September 8, 1944. No

appeal was filed. Since it was entered, the decree has been

enforced only twice: in 1949 and in 1969.

A-16

6. Proceedings Following the Orr Ditch Case

In 1951, pursuant to the Indian Claims Commission Act,

25 U.S.C. § 70 et seq., the Tribe sued the government for

damage to the fishery. In 1973 the Commission found the

government liable. Northern Paiute Tribe v. United States,

30 Ind.Cl.Comm. 210 (1973). In 1975 the Claims Commis-

sion approved a compromise settlement of $8,000,000 in

the Tribe’s favor “on its claim for damages suffered as the

result of its not having received all of the water to which

it was entitled under rights reserved for the Pyramid

Lake Indian Reservation”. Pyramid Lake Paiute Tribe v.

United States, 36 Ind.Cl.Comm. 256 (1975). The parties

stipulated their belief that the Tribe’s water rights them-

selves were undiminished, and the award of damages did

not represent compensation for “the loss, diminution, or

taking of any water rights.” Id. at 259-60.

This action was filed by the government on December 21,

1973. The complaint purported not to “dispute the rights

decreed” in the Orr Ditch action but only to secure “addi-

tional rights” for the United States and the Tribe, with

priority dates superior to those of the defendants. The

government named as defendants not only those whose

rights stemmed from the Orr Ditch decree but also those

whose rights to Truckee River water originated elsewhere.

The State of Nevada was named as a defendant in its

proprietary capacity, in its governmental capacity as the

issuer of permits to appropriate unappropriated waters,

and as parens patriae for its citizens.

The complaint alleged a reserved water right for the

Reservation for fishery purposes, with an 1859 priority

7

A-17

date. The government also sought water for the Stillwater

Wildlife Refuge, designated in 1948; the Toiyabe National

Forest, set aside in 1905, 1909, and 1926; and other pur-

poses.

Many of the 17,000 defendants raised, as an affirmative

defense, the preclusive effect of the Orr Ditch decree. The

plaintiffs sought to avoid preclusion on equitable grounds

and on the ground that in the Orr Ditch case the govern-

ment plaintiff had an impermissible conflict of interest. The

plaintiffs maintained that precluding litigation of the Res-

ervation’s fishery water right would deprive the Tribe of

due process of law. In February 1975 the district court

bifurcated the trial to consider the res judicata issue sep-

arately from all other issues. The trial on this issue com-

menced on November 17, 1975 and continued intermittently

through May 20, 1976. Briefs were submitted and final

argument heard on October 1977. The district court held

that the Orr Ditch decree was res judicata and dismissed

the government’s claim to the reserved water right for the

Reservation for fishery purposes. The district court dis-

missed the Tribe’s complaint in intervention in its entirety.

The district court held that the cause of action asserted

here was part of the same cause of action a erted in Orr

Ditch. The plaintiffs were both held to be in privity with

the plaintiff in Orr Ditch and all defendents here in privity

with the Orr Ditch defendants. As to the government’s

conflict of interest in Orr Ditch, the court found as follows:

“That by the enactment of the Reclamation Acts of

1902 and 1904, which declared a national policy of ree-

lamation of the arid lands of the West, and the imple-

mentation thereof by the Department of the Interior

A-18

by the construction and establishment of the Newlands

Reclamation Project, there was a foreseeable conflict

of purposes created by the Congress within the In-

terior Department and as between the Bureau of Rec-

lamation on the one hand in asserting large water

rights for its reclamation projects and the Bureau of

Indian Affairs on the other in the performance of its

obligations to protect the rights and interests of the

Indians on the Pyramid Lake Paiute Indian Reserva-

tion. That this conflict of purposes was apparent prior

to and during the Orr Ditch proceedings and was

resolved within the executive department of govern-

ment by top-level executive officers acting within the

scope of their Congressionally-delegated duties and

authority and were political and policy decisions of

those officials charged with that responsibility, which

decisions resulted in the extinguishment of the al-

leged fishery purposes water right.

“The government lawyers in Orr Ditch, both depart-

mental, agency and bureaus, as well as those charged

with the responsibility for the actual conduct of the

litigation, are not chargeable with an impermissible

conflict of purpose or interest in carrying out the deci-

sions and directions of their superiors in the executive

department of government and the Tribe has not suf-

fered any deprivation or denial of due process of law

by reason thereof which may be asserted or applied in

this case to diminish or defeat the rights of the de-

fendants acquired by the adjudication and the final

decree in Orr Ditch. The good faith or motives of said

government counsel is not questioned by plaintiff and

the Tribe in this proceeding.”

*We note that the district court did not find that executive officials

intentionally extinguished the fishery claim but only that their

decisions resulted in extinguishment.

A-19

The court also found that since 1944, Congress, the execu-

tive branch, and the courts have recognized the govern-

ment’s actions in Orr Ditch, confirmed them, and “recom-

pensed the Tribe” for any loss.

The plaintiffs contended below that a water right for

fishery purposes could be implemented in such a way that

any harm to the defendants would be small. The district

court held that it was the plaintiffs’ burden to prove this

contention, and that the burden was not met.

ISSUES

The issues presented by this appeal fall into four general

categories:

I. Those issues relating to the government's authority

in bringing the Orr Ditch suit:

A. Did Congress authorize the Secretary of the Interior

to extinguish the Reservation water rights? Under this

heading we discuss the Reclamation Act of 1902 and the

1904 Appropriations Act.

B. Did Congress authorize the Secretary to seek a judi-

cial decree quantifying federally-reserved water rights?

II. Those issues relating to the specific elements of the

res judicata defense:

A. Is the cause of action asserted here part of the same

cause of action asserted in Orr Ditch?

B. What parties may rely on the Orr Ditch decree?

1. Orr Ditch defendants.

2. Truckee-Carson Irrigation District.

A-20

III. Congressional actions since 1944 said to ratify the

Orr Ditch decree.

IV. Finally, we discuss briefly several arguments which

the trial court either rejected or did not consider con-

trolling.

We apply the “clearly erroneous” standard to the district

court’s findings of fact. However, in several instances,

conclusions listed by the district court as “findings of fact”

include legal conclusions. This is true of the district court’s

findings concerning the nature of the government’s conflict

(quoted at 1295-1296 supra). We are not bound by the legal

conclusions or the mixed findings of law and fact. See

Bogardus v. Commissioner, 302 U.S. 34, 58 S.Ct. 61, 82

L.Ed. 32 (1937); United States v. One Twin Engine Beech

Airplane, 533 F.2d 1106 (9th Cir. 1976) ; Official Creditors

Comm'n v. Ely, 337 F.2d 461, 467 (9th Cir. 1964), cert.

denied, 380 U.S. 978, 85 S.Ct. 1342, 14 L.Ed.2d 272 (1965) ;

Weible v. United States, 244 F.2d 158 (9th Cir. 1957) ; FTC

v. Texaco, Inc., 555 F.2d 862, 876 n. 29 (D.C. Cir. 1977),

cert, denied, 431 U.S. 974, 97 S.Ct. 2940, 53 L.Ed.2d 1072

(1977); Cordovan Assoc. v. Dayton Rubber Co. 290 F.2d

858, 861 (6th Cir. 1961). Accordingly, we have indepen-

dently reviewed the evidence to assess these findings.

DISCUSSION

I. Authority for the Orr Ditch Proceedings.

A. Did Congress authorize the Secretary of the Interior

to extinguish the Reservation water rights?

The district court found that the 1902 Reclamation Act,

which provided general authority for reclamation projects

A-21

and the 1904 Appropriations Act, which provided specific

authority to reclaim and dispose of Pyramid Lake Reser-

vation lands, demonstrated Congress’s intent to subordi-

nate the Tribe’s property to reclamation projects. It relied

heavily on a 1915 Supreme Court decision, Henkel v.

United States, 237 U.S. 43, 35 S.Ct. 536, 59 L.Ed. 831

(1915), for its interpretation of the Reclamation Act. We

first address the authority conferred by the 1902 Reclama-

tion Act.

1. The Reclamation Act of 1902.

The Reclamation Act of 1902 confers on the Secretary

broad condemnation authority.* The district court found

*Relevant sections of the Reclamation Act are as follows:

“Sec. 7. That where, in carrying out the provisions of this

act, it becomes necessary to acquire any rights or property, the

Secretary of the Interior is hereby authorized to acquire the

same for the United States by purchase or by condemnation

under judicial process, and to pay from the reclamation fund

the sums which may be needed for that purpose, and it shall be

the duty of the Attorney-General of the United States upon

every application of the Secretary of the Interior, under this act,

to cause proceedings to be commenced for condemnation

within thirty days from the receipt of the application at the

Department of Justice.

“Sec. 8. That nothing in this act shall be construed as affect-

ing or intended to affect or to in any way interfere with the laws

of any State or Territory relating to the control, appropriation,

use, or distribution of water used in the irrigation, or any vested

right acquired thereunder, and the Secretary of the Interior, in

carrying out the provisions of this act, shall proceed in con-

formity with such laws, and nothing herein shall in any way

affect any right of any State or of the Federal Government or

of any landowner, appropriator, or user of water in, to, or from

any interstate stream or the waters thereof: PROVIDED, That

the right to the use of water acquired under the provisions of

A-22

that this impliedly authorized the Secretary to acquire any

property needed for reclamation projects, whether the

owner of the property was an Indian tribe or a private

owner. The court held that the Reclamation Act created a

conflict between the need to develop reclamation projects

and the responsibility to protect Indian property. By di-

recting the Secretary to develop reclamation projects, and

authorizing him to use the condemnation power, Congress

authorized the Secretary to use the broadest possible dis-

cretion in acquiring property. This necessarily included

the power to extinguish Indian water rights. The trial

court found the Secretary did this in the course of the

Orr Ditch litigation. We reject this analysis.

The Reclamation Act in itself conferred no water rights.

It provided means for acquiring water rights, but only

under state law. It is now settled that except when incon-

sistent with “clear congressional directives” respecting a

reclamation project, section 8 of the Reclamation Act re-

quires the Secretary to comply with state law in acquiring

water rights. California v. United States, 438 U.S. 645,

665-66, 671 n. 24, 98 S.Ct. 2985, 2996, 2999 n. 24, 57 L. Ed. 2d

1018 (1978).*

this act shall be appurtenant to the land irrigated and beneficial

use shall be the basis, the measure, and the limit of the right.

0 © * 2 0 0

Sec. 10. That the Secretary of the Interior is hereby au-

thorized to perform any and all acts and to make such rules and

regulations as may be necessary and proper for the purpose of

carrying the provisions of this act into full force and effect.”

Act of June 17, 1902, 32 Stat. 389, codified at 43 U.S.C. §§ 421, 383.

*We find no merit to defendant Nevada's suggestion that Cali-

fornia v. United States, supra, announces a new principle of law

that should not be given retroactive effect. See Ivanhoe Irr. Dist. o.

A-23

Nor does the Reclamation Act confer authority to ac-

quire additional water for a reclamation project by ex-

tinguishing federal water rights reserved for other pur-

poses. [The Secretary of the Interior could not take any

action in appropriating the waters of the state streams

‘which could not be undertaken by an individua’ or cor-

poration if it were in the position of the Government as

regards the ownership of its lands.’” California v. United

States, supra, 438 U.S. at 665, 98 S.Ct. at 2996 (quoting

from HR Rep. No. 794, 57th Cong., Ist Sess. 7-8 (1902)).

Federal reserved rights cannot be acquired or extinguished

under state water laws. FPO v. Oregon, 349 U.S. 435, 444,

75 S.Ct. 832, 838, 99 L.Ed. 1215 (1955); United States v.

Cappaert, 508 F.2d 313, 320 (9th Cir. 1974), af d, 426 U.S.

128, 96 S.Ct. 2062, 48 L.Ed.2d 523 (1976); and see Minne-

sota v. United States, 305 U.S. 382, 386-87, 59 S.Ct. 292,

294, 83 L.Ed. 235 (1939). Accordingly, federally reserved

water rights, such as those appurtenant to the Pyramid

Lake reservation, could not be acquired under the Reclama-

tion Act.

McCracken, 357 U.S. 275, 291, 78 S.Ct. 1174, 1183, 2 L.Ed.2d 1313

Co, 234 US. 228, 34 S.Ct. 840, 58 L.Ed. 1290 (1914); Dugan o.

372 U.S. 609, 83 S.Ct. 999, 10 L.Ed.2d 15 (1963); United

Cc

A-24

This conclusion is also backed by sound policy. Under

the Winters doctrine, when the federal government re-

serves land for federal purposes, it impliedly reserves suffi-

cient water to serve those purposes. We cannot suppose

that reservations made for non-reclamation purposes were

impliedly supplanted by the reclamation program. We do

not say that Congress cannot abolish federal reservations,

but we must hesitate to infer this, absent the clearest legis-

lative directive.

This consideration applies a fortiori when Indian water

rights are involved. An intent to extinguish Indian prop-

erty rights is “not to be lightly imputed to Congress.”

Menominee Tribe v. United States, 391 U.S. 404, 413, 88

S.Ct. 1705, 1711, 20 L.Ed.2d 697 (1968). Such a drastic

result requires “a clear expression of congressional in-

tent.” United States v. Winnebago Tribe, 542 F.2d 1002,

1005 (8th Cir. 1976). Executive order reservations such as

the Pyramid Lake reservation merit “the same protection

as the Indian title to reservations created by treaty or

statute.” United States v. Southern Pacific Transportation

Co., 543 F. 2d 676, 686 (9th Cir. 1976). Ambiguities in stat-

utes are resolved in favor of the Indians. United States v.

Santa Fe Pacific R.R., 314 U.S. 339, 354, 62 S.Ct. 248, 255,

86 L.Ed. 260 (1941). Thus, a general statute, such as the

Reclamation Act, is not interpreted to authorize the ex-

tinguishment of Indian property, absent a clear showing

of congressional intent. Leavenworth, Lawrence, & Gal-

veston R.R. v. United States, 92 U.S. 733, 742, 23 L.Ed. 634

(1876) ; McCandless v. United States, 25 F.2d 71 (3d Cir.

A-25

1928) ; Confederated Tribes v. Alexander, 440 F.Supp. 553

(D.Or.1977).°

Accordingly, we reject the defendants’ suggestion that

the Reclamation Act of 1902 conferred on the Secretary

authority to extinguish the Pyramid Lake Tribe’s water

rights. Much less can we agree that the Act conferred

authority to proceed to extinguish these rights in the “back-

handed” manner suggested by the defendants. Menominee

Tribe v. United States, supra, 391 U.S. at 412, 88 S.Ct. at

1710-1711. Even where the Secretary has acquired existing

water rights under state law, he has typically provided

some notice to the affected owner. E. g., Dugan v. Rank,

372 U.S. 609, 83 S.Ct. 999, 10 L.Ed.2d 15 (1963); United

States v. Gerlach Live Stock Co., 339 U.S. 725, 70 S. Ct. 955,

94 L.Ed. 1231 (1950). We must assume that if Congress

had intended to confer authority to extinguish Indian prop-

erty rights, it would have provided for a more straight-

forward procedure. See Waters and Water Rights, supra,

at 162 n.20.

The district court relied on Henkel v. U.S., supra, 237

U.S. 43, 35 S.Ct. 536, 59 L.Ed. 831, for its interpretation of

the authority conferred by the 1902 Reclamation Act.

Henkel held that the broad authority conferred by section 7

FC v. Tuscarora Indian Nation, 362 U.S. 99, 80 S.Ct. 543, 4

L.Ed.2d 584 (1960), is not to the contrary. The land at issue there

was held by Indians in fee and not by the government in trust. The

broad condemnation authority conferred by the Federal Power Act,

involved in Tuscarora, could be interpreted to apply to fee lands

as well as any other non-trust lands. Here we are concerned with

trust property, the title to which is held by the U.S. See United

States v. Winnebago Tribe, supra, 542 F.2d at 1005; Getches, Rosen-

felt, and Wilkinson, Federal Indian Law 201, 203 (1979).

A-26

of the Reclamation Act was intended to permit acquisition

by purchase of Indian lands. The action sanctioned in

Henkel was of an entirely different character than the ac-

tion involved here. In Henkel the Indians involved received

cash compensation, and were permitted to select other

allotments in lieu of those taken. In short, Henkel involved

a purchase, specifically authorized by section 7 of the

Reclamation Act. Here, in contrast, the Secretary has never

declared an intention to purchase, extinguish, or acquire

the Tribe’s water rights. No compensation was paid or

even offered. Indeed, the government takes the position

that acquisition was never intended. Henkel’s broad dicta

can have little independent force in this setting.

2. The 1904 Appropriations Act.

The district court held that section 26 of the 1904 Ap-

propriations Act“ specifically authorized the Secretary to

*Section 26 of the 1904 Act provides:

“That in carrying out any irrigation enterprise which may be

undertaken under the provisions of the Reclamation Act of

June seventeenth, nineteen hundred and two, and which may

make possible and provide for, in connection with the reclama-

tion of other lands, the reclamation of all or any portion of the

irrigable lands on the Pyramid Lake Indian Reservation,

Nevada, the Secretary of the Interior is hereby authorized to

reclaim, utilize, and dispose of any lands in said reservation

which may be irrigable by such works in like manner as though

the same were a part of the public domain: PROVIDED, That

there shall be reserved for and allotted to each of the Indians

belonging on the said reservation five acres of the irrigable

lands. The remainder of the lands irrigable in said reservation

shall be disposed of to settlers under the provisions of the

Reclamation Act: PROVIDED, FURTHER, That there shall be

added to the charges required to be paid under said Act by

settlers upon the unallotted Indian lands such sum per acre as

r

A- 27

commit portions of the Tribe's land to the Newlands proj-

ect. We agree with this interpretation of section 26. We do

not agree that section 26 authorized the Secretary to ex-

tinguish the Tribe’s water rights in the Orr Ditch pro-

ceedings.

Section 26 was never implemented. No 5-acre allotments

were ever made to Indians. No surplus land was disposed

of. No Indian lands received irrigation water from the

Newlands project. Even assuming that disposal of surplus

reservation land would have reduced the Tribe’s reserved

water rights,’ disposal under section 26 never occurred.“

in the opinion of the Secretary of the Interior shall fairly rep-

resent the value of the unallotted lands in said reservation

before reclamation, said sum to be paid in annual installments

in the same manner as the charges under the Reclamation Act.

Such additional sum per acre, when paid, shall be used to pay

into the reclamation fund the charges for the reclamation of

the said allotted lands, and the remainder thereof shall be

placed to the credit of said Indians and shall be expended from

time to time, under the direction of the Secretary of the In-

terior, for their benefit.”

33 Stat. 189, 225 (1903-1905).

E. g., under the irrigable acreage approach to quantifying re-

served water rights, see Arizona v. California, 373 U.S. 546, 83 S.Ct.

1468, 10 L.Ed.2d 542 (1963), a reduction in irrigable reservation

land would imply a reduction in the quantity of the reserved

water right.

*In 1904 the allotment policy dominated federal-Indian affairs.

See generally, F. Cohen, Handbook of Federal Indian Law 217,

et seq. (1942). In 1934 the Indian Reorganization Act, 48 Stat. 984,

25 U.S.C. § 461 et seq., withdrew authority for further allotments.

See Moe v. Confederated Salish and Kootenai Tribes, 425 U.S.

463, 479, 96 S.Ct. 1634, 1644, 48 L.Ed.2d 96 (1976); Mattz v. Arnett,

412 U.S. 481, 496 n.18, 93 S.Ct. 2245, 2254, n.18, 37 L.Ed.2d 92

A-28

In these circumstances section 26 can have no effect on the

Tribe’s water rights.

Defendant City of Reno suggests alternatively that sec-

tion 26 had a broader purpose than reclamation: it was

intended to compel members of the Tribe to become farm-

ers, by extinguishing the Tribe’s fishery. We do not doubt

that such a step might have been consistent with the mood

of the times. See, e. g., Rosebud Sioux Tribe v. Kneip, 430

U.S. 584, 97 S.Ct. 1361, 51 L.Ed.2d 660 (1977). Nor do we

doubt that Congress had the power to take such a step. See

Lone Wolf v. Hitchcock, 187 U.S. 553, 23 S. Ct. 216, 47 L. Ed.

299 (1903). However, we have not been directed to any

legislative history of the 1904 Act showing an intent to

extinguish the fishery, and we find no such indication in

the text of the Act.“ We must therefore reject the City’s

suggestion.

The City also contends that section 26 was in effect im-

plemented in the Orr Ditch proceedings. We see no merit

in this argument. There is no evidence that in the course

*Compare the history of the neighboring Walker River Indian

Reservation, which was established by the same document and con-

firmed by a nearly identical executive order as established the

Pyramid Lake Reservation. Both reservations included lakes with

fisheries and the lower reaches of rivers feeding the lakes. The

statute authorizing the allotment of the Walker River Reservation

provided for 20 acre allotments and, with the consent of a majority

of the Tribe, the relinquishment of the rest of the reservation.

32 Stat. 245, 260. Pursuant to this statute most of the Walker River

Reservation, including Walker Lake, was ceded to the government.

United States v. Southern Pac. Transp. Co., supra, 543 F.2d at 693-

96. If Congress intended to extinguish the Tribe's fishery, we must

assume that the allotment process, demonstrated on the Walker

River Reservation, was the means Congress chose.

A-29

of the Orr Ditch proceedings, government officials even

purported to allot tribal lands and distribute the surplus.

Without taking these steps, there could be no reduction of

the Tribe’s water rights under section 26 of the 1904 Act.

Nor was there any attempt to provide compensation to the

Tribe for taking surplus lands, which section 26 clearly

required.“

B. Was the Secretary Authorized to Obtain a Judicial

Decree Quantifying Reserved Water Rights?

Section 10 of the Reclamation Act of 1902 authorized the

Secretary “to perform any and all acts . . . as may be nec-

essary and proper for the purpose of carrying the provi-

sions of this act into full force and effect.” It is reasonable

to conclude that an action to quantify reserved water

rights was within the authority conferred hy section 10

of the Reclamation Act of 1902. This authority, with the

government’s guardianship interest in Indian trust land,

"The district court did not rest its holding directly on 25 U.S.C.

§§2 and 9. However, the defendants urge that two cases inter-

preting those sections, 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 Secre-

tary 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

Village 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. §§2 and 9. To be

valid, then, the Secretary's conduct in Orr Ditch must find its basic

authority elsewhere.

A-30

necessarily implied some authority to represent Reserva-

tion interests in litigation. See Heckman v. United States,

224 U.S. 413, 437-39, 32 S.Ct. 424, 431-432, 56 L.Ed. 820

(1912) (suit to cancel conveyance of restricted Indian

Jand) ; United States v. Rickert, 188 U.S. 432, 23 S.Ct. 478,

47 L.Ed. 532 (1903) (action to enjoin unauthorized taxa-

tion of Indian property); Cramer v. United States, 261

U.S. 219, 43 S.Ct. 342, 67 L.Ed. 622 (1923) ; United States

v. Ahtanum Irrigation District, 236 F.2d 321 (9th Cir.

1956), cert. denied, 352 U.S. 988, 77 S.Ct. 386, 1 L.Ed.2d

367 (1957) (suit to establish Indian water right).

The authority to represent the Tribe in litigation must

be distinguished from the authority to extinguish tribal

property interests. The Secretary’s policy decisions re-

garding the conduct of the Orr Ditch litigation could not,

in themselves, extinguish the Tribe’s property interests. To

the extent extinguishment occurs, it is the result of giving

the Orr Ditch decree preclusive effect, which could not be

determined either by administrative officials or by the court

rendering the decree. Taunton Gardens Co. v. Hills, 557

F.2d 877 (Ist Cir. 1977); Gonzales v. Cassidy, 474 F. ad 67,

74 (5th Cir. 1973); Restatement of Judgments, § 86, Com-

ment h (1942). See also Kaplan, Continuing Work of the

Civil Committee: 1966 Amendments to the Federal Rules

of Civil Procedure, 81 Harv.L.Rev. 356, 393 (1967).

Authority to represent the Reservation in litigation does

not give the government completely unrestricted control

over the litigation. The government acts as a trustee, which

implies obligations which may supplement the obligations

of an advocate. See, e. g., Restatement (Second) of Trusts

A-31

$§ 170 & Comments p, q, r (1959). It is therefore appro-

priate for courts to be concerned with the adequacy of the

government’s representation of its Indian wards, and to

grant tribes leave to intervene where proper. See, e. g.,

New Mexico v. Aamodt, 537 F.2d 1102, 1106 (10th Cir.

1976), cert. denied, 429 U.S. 1121, 97 S.Ct. 1157, 51 L. Ed. 2d

572 (1977); Manygoats v. Kleppe, 558 F.2d 556 (10th Cir.

1977).

Once litigation is concluded, a court’s focus must shift.

A collateral attack on a final judgment implicates a range

of interests. We must be concerned with the adequacy of

representation afforded the Reservation. We must also

protect adverse parties who have reasonably relied on the

government’s authority in the litigation. Principles of res

judicata are designed to take these divergent interests into

account. Accordingly, we turn to consider the requirements

of res judicata rules.

II. Res Judicata.

We next address the question whether, under traditional

principles of res judicata, the Orr Ditch litigation can pre-

clude litigation of the cause of action asserted here. We

first decide whether this cause of action is part of the

Orr Ditch cause of action. We then consider what parties

may take advantage of the Orr Ditch decree.

A. Is This Cause of Action Part of the Cause of Action

Asserted in Orr Ditch?

The Tribe contends that the cause of action the govern-

ment asserted in Orr Ditch is not the same cause of action

asserted here. It makes three arguments: First, it points

A-32

out that different evidence would be required to sustain a

fishery water right aud an irrigation right. Second, it sug-

gests that in Orr Ditch the government intended to assert

only a cause of action for irrigation water, not for water

for all Reservation purposes. Third, it maintains that in

equitable water adjudications, only claims that are actually

litigated merge into the final decree. We will address these

arguments in order.

The Tribe asserts that different evidence would be re-

quired to establish a fishery water right than to establish

an irrigation water right. See United States v. The Haytian

Republic, 154 U.S. 118, 125, 14 S.Ct. 992, 994, 38 L.Ed. 930

(1894) ; Bankers Trust Co. v. Pacific Employers Insurance

Co., 282 F.2d 106 (9th Cir. 1960), cert. denied, 368 US.

822, 82 S.Ct. 41, 7 L.Ed.2d 27 (1961); Restatement of Judg-

ments, supra § 61. We find this analysis unpersuasive. The

basis for either kind of reserved right would be the same:

the executive actions by which the Reservation was estab-

lished, and the intent that motivated those actions. Sce

United States v. Walker River Irrigation District, 104

F.2d 334 (9th Cir. 1939). The priority date depended on

the same evidence. The water rights are appurtenant to

the same reservation, and relate to the same source of

water. Though a determination of quantity would depend

on different evidence, this by itself is insufficient to distin-

guish this cause of action from the Orr Ditch cause of

action. The “same evidence” test is but one of many tests

used to distinguish one cause of action from another. See

1B Moore’s Federal Practice 0.4101], at 1157-58 (2d ed.

1980); Restatement (Second) of Judgments §61 (Tent.

Draft No. 1, 1973). We find it undeterminative in this case.

A-33

This issue is determined by the district court’s findings

of fact regarding the intent of the government in bringing

the Orr Ditch case. The district court found [that Orr

Ditch was intended by all concerned, lawyers, litigants

and judges, as a general all inclusive water adjudication

suit which sought to adjudicate all rights and claims” to

the waters of the Truckee. This finding is not clearly erro-

neous. The complaint was drafted in comprehensive terms,

and was certainly adequate to assert all of the govern-

ment’s water rights claims. The purpose of the proceed-

ing was to obtain a decree upon which all parties could

rely. This purpose would have been defeated if the gov-

ernment’s action did not include important claims that

could upset the decreed rights of the parties.

In Orr Ditch the government might have sought an

adjudication for certain water uses. See Hudson v. West,

47 Cal.2d 823, 306 P.2d 807, 811 (1957). It might have

sought a decree leaving open the possibility of expanding

the Tribe’s water right, as in Conrad Investment Co. v.

United States, supra, 161 F. 829. It chose, instead, a com-

prehensive adjudication. See United States v. Walker

River Irrigation District, supra, 104 F.2d 334. Accord-

ingly, we reject the Tribe’s suggestion that the Orr Ditch

cause of action was intended to be less than comprehensive.

The Tribe asserts that in equitable water adjudications

only claims actually litigated are barred from relitigation.

In effect, this rule would abolish the broader res judicata

doctrine of claim preclusion in water adjudications, leaving

only the doctrine of collateral estoppel or issue preclusion,

A-34

to prevent relitigation.“ We cannot accept this position

in its full sweep. We are bound by the district court’s find-

ing that the government placed in issue the full Reserva-

tion cause of action. Between parties with adverse claims,

causes of action properly placed in issue may merge in an

equity decree. Union Mill & Mining Co. v. Dangberg, 81

F. 73 (C.C.D.Nev.1897) ; 3 Kinney on Irrigation and Water

Rights § 1536, at 2766 (1912). We therefore reject the

Tribe’s suggestion that the Orr Ditch decree could bar

relitigation of only those claims actually litigated.

B. Parties

1. The Orr Ditch Defendants.

The Tribe contends that it was improperly and inade-

quately represented in the Orr Ditch case and cannot be

bound by the judgment, consistent with due process. The

Orr Ditch defendants insist that due process offers the

Tribe no protection in this setting. They also assert that

they had no knowledge of any impropriety in the gov-

ernment’s representation in Orr Ditch, and so are en-

titled to rely on the decree. We address the defendants’

arguments in order.

Generally, preclusion extends no further than to the

parties of the prior litigation. Hansberry v. Lee, 311 U.S.

“Under the doctrine of res judicata (or “claim preclusion”) a

litigated.

Serv. Corp, 349 U.S. 322, 326, 75 S.Ct. 865, 867-868,

99 L.Ed. 1122 (1955).

A-35

32, 40, 61 S.Ct. 115, 117, 85 L.Ed. 22 (1940). This rule

stems from our society’s concern for individual rights as

expressed in the due process clauses of the fifth and four-

teenth amendments. See Blonder-Tongue Laboratories,

Inc. v. University of Illinois Foundation, 402 U.S. 313,

329, 91 S.Ct. 1434, 1443, 28 L.Ed.2d 788 (1971) (dictum) ;

Postal Telegraph Cable Co. v. City of Newport, 247, US.

464, 476, 38 S.Ct. 566, 570-571, 62 L.Ed. 1215 (1918); 1B

Moore’s Federal Practice, supra, {0.411[1], at 1252; F.

James & G. Hazard, Civil Procedure § 11.22 (2d ed. 1977).

Thus, “judicial action enforcing [the prior judgment]

against the person or property of the absent party is not

that due process which the Fifth and Fourteenth Amend-

ments require.” Hansberry v. Lee, supra, 311 U.S. at 41, 61

S. Ot. at 118. Although these authorities deal with personal

judgments their reasoning on procedural due process

applies to quiet title judgments. See O’Boyle v. Bevil, 259

F.2d 506, 513 (5th Cir. 1958), cert. denied, 359 U.S. 913,

79 S. Ct. 590, 3 L.Bd.2d 576 (1959) (citing Hansberry v.

Lee, supra).

This general rule is subject to an exception for persons

in privity with parties. See 1B Moore’s Federal Practice,

supra, J 0.411[1]. Privity “denotes a legal conclusion rather

than a judgmental process.” Southwest Airlines Co. v.

Texas International Airlines, Inc., 546 F.2d 84, 95 (5th

Cir.), cert. denied, 434 U.S. 832, 98 S. Ot. 117, 54 L.Ed.2d

93 (1977). It simply represents a conclusion that a person

is so closely connected to a party that with respect to the

issues in litigation the person’s interests are essentially

the same as those litigated interests of the party. Jefferson

School of Social Science v. Subversive Activities Control

A-36

Board, 331 F.2d 76, 83 (D.C. Cir. 1963). A finding of

privity, then, reflects a belief that the relation between the

party and non-party is so close that the judgment may

fairly bind the non-party. F. James & G. Hazard, supra, at

576. If the relationship is not sufficiently close, privity is

lacking and preclusion in that case would necessarily deny

due process to the non-party.

Privity and fairness exist if a party represented the

interests of the non-party, such as a guardian or fiduciary

might represent a ward or beneficiary. The case law clearly

supports this principle, see, e. g., Kersh Lake Drainage

District v. Johnson, 309 U.S. 485, 491, 60 S.Ct. 640, 644,

84 L.Ed. 881 (1940) (decree binds bondholders represented

by indenture trustee under bond issue) ; Heckman v. United

States, supra, 224 U.S. at 445-46, 32 S.Ct. at 434-435 (de-

cree will bind Indians represented by United States) ; Ker-

rison v. Stewart, 93 U.S. 155, 160, 23 L.Ed. 843 (1876)

(decree binds beneficiaries represented by trustee), and

the rule appears in the Restatement (Second) of Judg-

ments.

“A person who is not a party to an action but who

is represented by a party is bound by. . . the rules of

res judicata as though he were a party. A person is

represented by a party who is:

“(a) The trustee of an estate or interest of which

the person is a beneficiary; or

„(e) The executor, administrator, guardian, con-

servator, or similar fiduciary manager of an in-

terest of which the person is a beneficiary; or

“(d) An official or agency invested by law with

authority to represent the person’s interests; or

A-37

“(e) The representative of a class of persons

similarly situated designated as such with the ap-

proval of the court, of which the person is a member.

Restatement (Second) of Judgments § 85 (Tent. Draft No.

2, 1975). Thus, the general rule that non-parties are not

precluded is subject to the privity exception when a non-

party was represented in the prior proceeding.

But this exception is itself subject to exception. Repre-

sentation of a non-party will not always result in the same

preclusive effects that bind parties.

“A person is not bound by a judgment for or against

a party who purports to represent him if:

“(d) With respect to the representative of a class,

there was such a substantial divergence of interest

between him and the members of the class, or a group

within the class, that he could not fairly represent

them with respect to the matters as to which the

judgment is subsequently invoked, or

“(e) The representative failed to prosecute or de-

fend the action with due diligence and reasonable

prudence, and the opposing party was on notice of

facts making that failure apparent.”

Id. 586. Courts considering the preclusive effects of rep-

resentative litigation have noted this limit on the effects

of such judgments. See e. g., Hansberry v. Lee, supra,

311 U.S. at 42-44, 61 S.Ct. at 118-119 (conflicting interests

of representatives and members of class prevent finding of

res judicata that would infringe due process rights of

non-parties); Kersh Lake Drainage District v. Johnson,

elf a person was represented in the prior proceeding, a judgment

may bind him even though he was not personally served. See id.,

§ 85(2).

A-38

supra, 309 U.S. at 491, 60 S.Ct. at 644 (judgment from

representative litigation by indenture trustee binds bond-

holders unless there is fraud or collusion); Kerrison v.

Stewart, supra, 93 U.S. at 160 (judgment from representa-

tive litigation by trustee binds beneficiaries unless there is

fraud or collusion between the representative and the ad-

verse party). Fairness requires that courts place these

limits on the binding effects of judgments obtained by rep-

resentatives. In the context of class actions and other types

of representative suits, at some point the “represe ted”

persons’ interest in freedom from a flawed judgment over-

shadows policies against relitigation.“ The exceptions

The requisites for preclusion differ depending upon the type of

In a class action or a case of “virtual representa-

tion” by the government, a divergence of interests between the

representative and the represented persons denies the judgment

effects as against the latter. See Hansberry v. Lee, supra,

311 U.S. at 42-44, 61 S.Ct. at 118-119 (class action); Southwest

Airlines Co. v. Texas Int'l Airlines, Inc., supra, 546 F.2d at 97-102

(virtual representation by government of private interests); Aero-

jet Gen. Corp. b. Askew, 511 F.2d 710, 719-20 (Sch Cir. 1975)

(virtual representation by state entity of county entity). On the

in the prior proceeding. See e. g., Kerrison v. Stewart, supra, 93

A-39

listed in section 86 of the Restatement (Second) constitute

instances when the “represented” persons’ interests pre-

dominate. Thus, a holding within one of the exceptions is

essentially equivalent to a finding that preclusion against

the represented party would be a denial of due process.“

transitory and ordinarily not otherwise readily enforcible. Simi-

lar scrutiny is appropriate concerning the adequacy of repre-

sentation in actions by or against a public agency or official

where the judgment would have preclusive effects in an action

by citizens or taxpayers concerning the same subject matter.”

Restatement (Second) of Judgments, supra, § 86 Comment f. 0

Nevertheless, the same general principles control all these actions.

“Although Hansberry involved a class action suit, its due process

principles also control” the general application of res judicata.

Southwest Airlines Co. b. Texas Int'l Airlines, Inc., 546 F. ad at

95-96. Cf. Restatement (Second) of Judgments, supra, § 86 Re-

porter's Note, at 79 (Hansberry v. Lee “stands in any event as a

reminder that there are constitutional limits on giving binding

effect to litigation conducted through representatives). The differ-

ing dimensions of preclusion among the different types of represen-

tative suits simply indicate that the balance struck for each depends

on the different concerns presented by each situation.

“This view indicates no more than that the exceptions to the

preclusive effects of representative suits may be seen from a second

perspective. ;

“In one sense this Section [86] is a list of exceptions to the

general rule that a representative proceeding is binding on the

person It may also be considered as describing

the situations in which the proceedings fail to conform to the

necessary conditions for representation and application of the

general principle that one is not bound by an adjudication to

which he was neither a party nor represented by one. The

provisions of this section are thus closely related to, if indeed

they are not particularized expressions of, the requirements of

due process, a fact which historically was obscured by the

tendency of courts to see some of these questions in the con-

text of necessary parties issues.”

ee ee ee ee ee

at

A-40

In such cases the ‘‘represented’’ persons are not in privity

with the ‘‘representative’’ parties.

In order to answer the privity question, we must first

determine whether the Tribe is entitled to due process pro-

tection in this setting. The defendants suggest that due

process offers the Tribe no comfort. They offer two reasons

in support of this position. First, they claim that the fed-

eral-Indian relation is special and not subject to normal

due process analysis. Second, they conclude that these

Indians are not entitled to due process protection of these

water rights, in any event, because the rights stem from

an executive order reservation, a reservation that in the

defendants’ views creates an insufficient “property interest”

for due process purposes. Neither of these reasons can

withstand scrutiny.

We hold that the Tribe has a legally cognizable “prop-

erty” interest in reservation property interests and there-

fore due process protections apply. The test of such

interests appears in Board of Regents v. Roth, 408 U.S. 564

92 S.Ct. 2701, 33 L.Ed.2d 548 (1972):

“To have a property interest in a benefit, a person

clearly must have more than an abstract need or desire

for it. He must have more than a unilateral expecta-

tion of it. He must, instead, have a legitimate claim of

entitlement to it. It is a purpose of the ancient insti-

tution of property to protect those claims upon which

people rely in their daily lives, reliance that must not

be arbitrarily undermined. It is a purpose of the con-

stitutional right to a hearing to provide an opportunity

for a person to vindicate those claims.”

408 U.S. at 577, 92 8. Ct. at 2709.

A4l

To have a sufficient property interest the Tribe need not

show that it may keep the water rights against all the

world. The Supreme Court “has fully and finally rejected

the wooden distinction between ‘rights’ and ‘privileges’

that once seemed to govern the applicability of procedural

due process rights.” Id. at 571, 92 S.Ct. at 2706; see

Graham v. Richardson, 403 U.S. 365, 374, 91 S.Ct. 1848,

1853, 29 L.Ed.2d 534 (1971). Indeed this court has held

that Native Alaskans seeking land allotments from the

Secretary of the Interior are entitled to a due process

hearing before their applications are denied. Pence v.

Kleppe, 529 F.2d 135 (9th Cir. 1976). The Pence Court re-

versed the district court’s holding that the plaintiffs had

no property interest in allotment lands which the Secretary

could award in his discretion. Id. at 140-41. The courts have

applied such logic in a variety of contexts. See, e. g., Gold-

berg v. Kelly, 397 U.S. 254, 90 S.Ct. 1011, 25, L.Ed.2d 287

(1970) (statutory entitlement to welfare benefits); Fuen-

tes v. Shevin, 407 U.S. 67, 92 S.Ct. 1983, 32 L.Ed.2d 556

(1972) (interest in secured property). By these standards

Indian water rights merit due process protection. The

property interest asserted here is at least as great as the

interest at stake in Pence.

A different result is not mandated just because this Tribe

derives its water rights from executive order. In general,

the government may retake executive order lands without

compensation. Sioux Tribe of Indians v. United States, 316

U.S. 317, 325-30, 62 S.Ct. 1095, 1098-1101, 86 L.Ed. 1501

(1942). But that rule does not mean that executive order

In 1946 Congress enacted the Indian Claims Commission Act,

which currently provides that the Commission shall hear and de-

A-42

lands or appurtenant rights may be taken without proce-

dural due process. As this Court has recently stated: “As

long as an executive order creating a reservation remains

in effect, the Indian title to the reservation lands deserves

the same protection as the Indian title to reservations cre-

ated by treaty or statute.” United States v. Southern Pa-

cific Transportation Co., supra, 543 F.2d at 686. Thus, the

question of a compensable interest in executive order lands

is irrelevant, just as the question of a compensable interest

in discretionary allotments was not an issue in the Pence

case.

The defendants next claim that because of the “unique”

Federal-Indian relation, government representation of In-

dians per se satisfies due process. Such a claim is one ex-

pression of the overly broad view that government control

over Indian property is without limit. But the federal-In-

dian relation does not require a holding that faithless gov-

ernmental acts against the Indians are not subject to review

by the courts on due process grounds.

Case law dealing with compensation for taking of Indian

rights provides a useful analogy. Authorities have long

recognized that the United States stands in a trust posi-

tion with respect to the Indians. This relation had been

President. 25 US.C.A. §70a (West. Supp. 1979). This

language provides jurisdiction in the Indian Claims Commission to

hear claims based on executive order lands. See Three Affiliated

Tribes of the Fort Berthold Reservation v. United States, 390 F. 2d

686 (Ct.Cl.1962). However, the Act confers jurisdiction only as

to claims arising before August 13, 1946, and presented to the Com-

mission by August 13, 1951. See 25 U.S.C. § 70k; Navajo Tribe v.

United States, 601 F.2d 536 (Ct. Cl. 1979), cert. denied, 444 US.

1072, 100 S.Ct. 1016, 62 L.Ed.2d 753 (1980).

A-43

compared with that of guardian-ward. See, e. g., Cherokee

Nation v. Georgia, 30 U.S. (5 Pet.) 1, 17, 8 L.Ed.2d 25

(1831). This guardianship concept has been used to relax

court control. The government can thus take some actions

that would otherwise seem confiscatory. F. Cohen, Handbook

of Federal Indian Law 170-71 (1942). Actions taken by the

United States in its trust capacity are not ordinarily sub-

ject to judicial review. Much as a fiduciary’s management

of trust assets need not be perfect, the government’s good

faith management of Indian property held in trust cannot

be questioned by the courts. See Lone Wolf v. Hitchcock,

supra, 187 U.S. at 565, 568, 23 S.Ct. at 221, 222.

But one would paint with too broad a brush if one con-

cluded that cases such as Lone Wolf generally restrained

the court’s scrutiny of the government’s dealings with

Indians. Plenary congressional power over Indians does

not mean that congressional power over Indians is not sub-

ject to express limitations upon congressional power, such

as the Bill of Rights. F. Cohen, supra, at 91 (citing Ste-

phens v. Cherokee Nation, 174 U.S. 445, 19 S.Ct. 722, 43

L.Ed. 1041 (1879)). In cases where the government does

not exercise g 2d faith, judicial due process review pro-

tects the Indians. See United States v. Creek Nation, 295

U.S. 103, 110, 55 S.Ct. 681, 684, 79 L.Ed. 1331 (1935) ; Three

Tribes of Fort Berthold Reservation v. United States, 390

F.2d 686 (Ct.Cl.1968). The Supreme Court has recently

reaffirmed that Lone Wolf's scope is limited to instances

of good faith management. See United States v. Sioux Na-

tion of Indians, 448 U.S. 371, 406-417, 100 S.Ct. 2716,

2736-2741, 65 L.Ed.2d 844, 871-76 (1980). Thus, the insula-

tion accorded actions by the government-trustee does not

A-44

apply to instances of governmental self-dealing because

“(s)poliation is not management.” Shoshone Tribe v.

United States, 299 U.S. 476, 498, 57 S.Ct. 244, 252, 81 L.Ed.

360 (1937). When the government sheds its “trustee” role

for one of “taker” the due process clause protects Indians’

rights“ by allowing compensation for the taking. Similar

principles should control the procedural due process bound-

aries of the federal-Indian relation“ —when the govern-

The Sioux Nation Court limited its holding to Indian lends

recognized by Congress because only those lands give rise to a

compensable interest. Id. 448 U.S. at 415 n.29, 100 S.Ct. at 2740

29, 65 L.Ed.2d at 875 n.29. Although this limitation has meaning

when determining what is compensable under the due process

clause, such a limitation does not apply in the procedural due

ust as the Lone Wolf obstacle is illusory with respect to the

Indians’ entitlement to due process, so too are the other potential

obstacles.

It is true that the federal-Indian relation must be evaluated in

historically used its treaty power to control Indian affairs. See F.

Cohen, supra, at 89-91. Indians have long been dependent on the

government, as a ward is dependent on a guardian. See Cherokee

Nation v. Georgia, supra, 30 U.S. (5 Pet.) at 17, 8 L.Ed. 25; United

States v. Kagama, 118 U.S. 375, 383-84, 6 S.Ct. 1109, 1113-1114, 30

L.Ed. 228 (1886). Thus, many actions may be insulated from strict

A-45

ment as a trustee in good faith adequately represents the

Indians they are bound by any ensuing judgment, but when

administrative officials violate their trust, due process

should prevent preclusion of the Indians to the extent it

would protect similarly represented non-Indians.

The Tribe’s rights in this case, thus, have familiar dimen-

sions. In general, representation by the United States will

bind an Indian tribe and the individual Indians. See Heck-

man v. United States, supra, 224 U.S. at 445-46, 32 S.Ct. at

434-435; United States v. Emmons, 351 F.2d 603, 604 (9th

Cir. 1965); Oklahoma v. United States, 155 F.2d 496, 498

(10th Cir. 1946); Creek Indians National Council v. Sin-

clair Prairie Oil Co., 142 F.2d 842, 845 (10th Cir.), cert.

denied 323 U.S. 78, 65 S.Ct. 269, 89 L.Ed. 624 (1944);

Pueblo of Picuris v. Abeyta, 50 F.2d 12, 13 (10th Cir.

1931) ; Vinson v. Graham, 44 F. 2d 772, 779 (10th Cir. 1930),

cert. denied, 283 U.S. 819, 51 S.Ct. 344, 75 L.Ed. 1435

(1931); Winship v. Ricketts, 32 F.2d 476, 479 (8th Cir.

1929). When the government breaches its trust to the

Tribes while openly advancing its own interest the Tribe

is not necessarily bound :*

a limitation to preclusion based on due process is

First, the leading case, Heckman v. United States, supra,

S. at 446, 32 S.Ct. at 435, in establishing its rule for preclu-

on a case of trustee, representation that

explicitly placed a limit on preclusion in cases of fraud or collusion.

See Kerrison v. Stewart, supra, 93 U.S. at 160. Second, neither the

8

2

A-46

[A] fiduciary does not bind those for whom he acts as

against third parties who are aware of the fiduciary’s

failure to fulfill his responsibility. As applied to litiga-

tion, this principle implies that a judgment is not

binding on the represented person where it is the

product of collusion between the representative and

the opposing party, or where, to the knowledge of the

opposing party, the representative seeks to further

his own interest at the expense of the represented per-

son. Where the representative’s management of the

litigation is so grossly deficient as to be apparent to

the opposing party, it likewise creates no justifiable

reliance interest in the adjudication on the part of the

opposing party.”

Restatement (Second) of Judgmenis, supra, 586 Com-

ment f. We need address only the question as to the de-

fendants’ knowledge of government impropriety in Orr

Ditch litigation. We assume, but do not decide, that the gov-

adequately represented by their guardian, the United States.”

Manygoats v. Kleppe. 558 F.2d 556, 558 (10th Cir. 1977). We can

discern no reason why Indians should not be entitled to adequate

representation and protection from fraud or collusion.

Indeed the rule espoused here receives substantial support from

recent Indian intervention cases. Where there was a “conflict of

interest between the proprietary interests of the United States” and

the Indians, one court allowed intervention because “[i]n such a

situation, adequate representation of both interests by the same

counsel is impossible.” New Mexico v. Aamodt, supra, 537 F. 2d at

1106-07. See also Cheyenne River Sioux Indians v. United States,

338 F.2d 906 (8th Cir. 1964), cert. denied, 382 U.S. 815, 86 S.Ct.

34, 15 L.Ed.2d 62 (1965) (no right of Indians to intervene where

government represented them in good faith). Cf. Rincon Band of

Mission Indians v. Escondido Mut. Water Co., 459 F.2d 1082, 1084-

85 (9th Cir. 1972) (Indians’ request for representation by United

States denied where government’s counsel would be faced with a

conflict of interest.)

A-47

ernment’s representation of the Tribe in Orr Ditch was

improper and inadequate.

The question is whether the Orr Ditch defendants were

aware of a failure by the government to fulfill its respon-

sibility to adequately represent the Tribe in the litigation.

The answer to this question determines whether the Orr

Ditch defendants reasonably relied on the government’s

representation of the Tribe’s interests. The district court

found that any impropriety in the government’s represen-

tation “was unknown to the defendants in Orr Ditch.”

Finding no. 31, R. 5602. The plaintiffs do not challenge

this finding. We cannot say it is clearly erroneous. Ac-

cordingly, the Orr Ditch defendants are entitled to rely on

the final decree.

We cannot agree that public policy requires us to sus-

pend the application of res judicata in this instance. Res

judicata serves important policies. It fosters reliance on

judicial decrees, eliminates expense to parties, conserves

judicial resources, and minimizes the possibility of incon-

sistent results. Commissioner v. Sunnen, 333 U.S. 591,

597, 68 S.Ct. 715, 719, 92 L.Ed. 898 (1948). There are

hardly maxims “more firmly established or of more value

in the administration of justice, than those designed to

prevent repetitious relitigation.” United States v. Throck-

morton, 98 U.S. 61, 65, 25 L.Ed. 93 (1878). We are not free

to suspend the application of the Orr Ditch decree merely

because we may think it erroneous. Reed v. Allen, 286 U.S.

191, 199-200, 52 S.Ct. 532, 533-34, 76 L.Ed. 1054 (1932);

Hatchitt v. United States, 158 F.2d 754, 756 (9th Cir. 1946).

A-48

We do not minimize the policies that weigh against the

finality of the decree. We place a high value on the nation’s

duty to protect Indian resources, consistent with congres-

sional and constitutional standards. Red Fox v. Red Foz,

564 F.2d 361, 365 (9th Cir. 1977). We know of no means

of measuring the value of Pyramid Lake. If restored, its

fishery would have enormous worth. We are also mindful

of the nation’s interest in the survival of endangered spe-

cies. See 16 U.S.C. § 1531 et seg. (Endangered Species

Act); Udall v. FPC, 387 U.S. 428, 87 S.Ct. 1712, 18 L.Ed.2d

869 (1967).

Nevertheless, we hold the policies served by res judicata

preponderate. These policies apply with special force

when titles to real property are involved. Minnesota Min-

ing Co. v. National Mining Co., 70 U.S. (3 Wall.) 332, 334,

18 L.Ed. 42 (1866); United States v. Title Insurance &

Trust Co., 265 U.S. 472, 486-87, 44 S. Ct. 621, 623, 68 L.Ed.

1110 (1924). In recent years beth Congress and the Su-

preme Court have recognized that finality in water adjudi-

cations cannot be attained when reserved rights remain

unsettled. See, e. g., 43 U.S.C. §666 (McCarran Amend-

ment); S.Rep. 755, 82d Cong. Ist Sess. (1951); United

States v. New Mezico, 438 U.S. 696, 98 S.Ct. 3012, 57 L.Ed.

2d 1052 (1978); Colorado River Water Conservation Dis-

trict v. United States, 424 U.S. 800, 810-11, 96 S.Ct. 1236,

1242-1243, 47 L.Ed.2d 483 (1976). And see Public Land Law

Review Commission, One Third of the Nation’s Lands 144

(1970) ; 6 Waters and Water Rights, supra, § 530 at 516.

There is no question that the Orr Ditch defendants and

many others have relied heavily on the finality of the de-

cree. The government’s representation of the Tribe’s inter-

A49

ests in Orr Ditch was analogous to that of a faithless

fiduciary who was nevertheless authorized to represent its

beneficiary. We hold that the district court properly dis-

missed the action with respect to the Orr Ditch defendants

and their successors in interest.

We also hold that subsequent appropriators who were

not parties to Orr Ditch, but who have reasonably relied

on the finality of the Orr Ditch decree, are entitled to rely

on its finality. Clearly the government intended to enable

such reliance when it consented to entry of the final Orr

Ditch decree. To be sure, the government did not employ

a statutory in rem procedure. Orr Ditch was an equitable

in personam action whose res judicata effect would nor-

mally be limited to parties and their privies. But this was

no garden variety quiet title action. It was a virtually com-

prehensive adjudication that approximated a statutory in

rem proceeding, and avoided the defects associated with

in personam water adjudications. The government framed

its complaint in the broadest possible way, to assert the

court’s jurisdiction power over all water users on the

river. It provided individual notice and widespread pub-

licity of the action. As with Nevada procedure, great care

was taken to assemble the most reliable and comprehensive

data concerning the parties’ needs and the river’s supply.

Interested parties not represented by the government were

given every opportunity to present their claims not just at

one hearing, but repeatedly, in proceedings spanning years.

There was adversity between the plaintiff and the defen-

dants, all concerned perceived that adversity, and it could

justly be supposed that the parties would assert all their

claims and defenses. The resulting decree was drafted in

A-50

broad terms, and the Orr Ditch parties were barred from

relitigating in any way the claims determined.

In these circumstances it would be manifestly unjust to

permit the Orr Ditch defendants to rely on the decree, and

not to permit subsequent appropriators, defendants here,

to do the same. Cf. City of Los Angeles v. City of San

Fernando, 14 Cal.3d 199, 123 Cal. Rptr. 1, 537 P.2d 1250,

1273 (1975); Restatement of Judgments, supra, § 70. Any

other conclusion would make it impossible ever finally to

quantify a reserved water right.

2. Truckee-Carson Irrigation District’.

As a general matter, a judgment does not conclude par-

ties who were not adversaries under the pleadings. Dob-

bins v. Barnes, 204 F.2d 546 (9th Cir. 1953); Restatement

of Judgments, supra, § 82; Restatement (Second) of Judg-

ments, supra, §82; 1B Moore’s Federal Practice, supra,

7 0.411[2}; Vestal, Preclusion/Res Judicata Variables:

Parties, 50 Iowa L.Rev. 27, 29 (1964). This is because “the

rules of res judicata are based upon an adversary system

of procedure which exists for the purpose of giving an op-

portunity to persons to litigate claims against each other.”

Restatement of Judgments, supra, § 82, Comment a. Where

there is no adversity under the pleadings, co-parties may

A-51

be bound only as to issues actually or necessarily litigated.

Town of Flagstaff’ v. Walsh, 9 F.2d 590 (9th Cir.), cert.

denied, 273 U.S. 695, 47 S.Ct. 92, 71 L.Ed. 844 (1926). See

also, Restatement (Second) of Judgments, supra, Comment

a; Developments in the Law—Res Judicata, 65 Harv.L.

Rev. 818, 860-61 (1952); Annot., 24 A.L.R.3d 318 (1969).

A strict adversity requirement does not necessarily fit

the realities of water adjudications. All parties’ water

rights are interdependent. See Frost v. Alturas, 11 Idaho

294, 81 P. 996, 998 (1905); Kinney, Irrigation and Water

Rights at 277. Stability in water rights therefore requires

that all parties be bound in all combinations. Further, in

many water adjudications there is no actual controversy

between the parties; the proceedings may serve primarily

an administrative purpose. Lasky, From Prior Appropri-

ation to Economic Distribution of Water by the State—

Via Irrigation Administration, 1 Rocky Mt.L.Rev. 161,

188 (1929). Were we concerned only with parties or co-

parties, we might be persuaded to relax the adversity

requirement.

The Tribe and the Project were neither parties nor co-

parties, however. They were non-parties who were repre-

sented simultaneously by the same government attorneys.

In representative litigation we should be especially careful

not to infer adversity between interests represented by a

single litigant. The very idea of representative litigation

is defeated if the representative asserts adverse claims

simultaneously. Under most circumstances, such represen-

tation is by definition inadequate. See Hansberry v. Lee,

supra, 311 U.S. 32, 61 S.Ct. 115, 85 L.Ed. 22; Manygoats

v. Kleppe, supra, 558 F.2d at 558; Rincon Band of Mission

A-52

Indians v. Escondido Mutual Water Co., 459 F.2d 1082,

1085 (9th Cir. 1972); Olson v. Miller, 263 F.2d 738, 740

(D.C.Cir.1959) ; Green v. Brophy, 110 F.2d 539, 542 (D.C.

Cir. 1940); In re Estate of Wiswall, 11 Ariz.App. 314, 464

P.2d 634, 641 (1970) ; Bogert on Trusts, § 593 (2d ed. 1960).

But compare United States v. Nixon, 418 U.S. 683, 94 S.Ct.

3090, 41 L.Ed.2d 1039 (1974); United States v. ICC, 337

U.S. 426, 69 S.Ct. 1410, 93 L.Ed. 1451 (1949). Rules of res

judicata have evolved safeguards to ensure the integrity

of representative functions. Restatement (Second) of Judg-

ments, supra, § 80(2), Comment a. We would un“ermine

those safeguards were we lightly to assume that the gov-

ernment intentionally represented conflicting interests.

By representing the Tribe and the Project against the

Orr Ditch defendants, the government compromised its

duty of undivided loyalty to the Tribe. See Restatement

(Second) of Trusts, supra, § 170, & Comments p, q, r. The

defendants suggest that the government assumed an even

more compromising posture. They suggest that the govern-

ment not only represented dual interests on the same side

of a dispute, but that the government simultaneously, with

the same lawyers, represented those dual interests in a dis-

pute between themselves. This posture is completely alien

to our adversary system and will not be inferred from

ambiguows facts. Before we conelude that government

officials have undertaken such representation in litigation,

we must be faced with a pleading in which this posture is

clearly assumed.

In this case, the government’s assumption of such a pos-

ture would be especially anumalous because of the possi-

bility of self-dealing at the expense of government wards.

A-53

See Navajo Tribe v. United States, 364 F.2d 320 (Ct. Cl.

1966). In determining what effect to give to ambiguous acts

of administrative officials we must not draw conclusions

that prejudice the government’s Indian wards unless the

government speaks its prejudicial intent clearly. See

United States v. Santa Fe Pacific R. R., supra, 314 U.S. at

354, 62 S.Ct. at 255; United States v. Southern Pacific

Transportation Co., supra, 543 F.2d at 690. Thus, the re-

quirement that adversity be established by pleadings is

particularly compelling in this setting.

Both the government and the court were alert to the need

to establish adversity among the co-defendants’ claims.”

The government was aware of the usual equity practiee to

file cross bills to set up adversity between co-partics. See

City of Owensboro v. Westinghouse, Church, Kerr & Co.,

165 F. 385 (6th Cir. 1908); Rickey Lana 4 Cattle Co. v.

Wood, 152 F. 22 (9th Cir. 1907), af d, 218 U.S. 258, 31 S.Ct.

11, 54 L.Ed. 1032 (1910); Ames Realty Co. v. Big lndian

Mining Co., 146 F. 166 (C.C.D.Mont. 1906). The govern-

ment proposed to eliminate this practice in Orr Ditch,

since the government’s complaint and orders of the court

had made it clear to all parties that the defendants’ claims

would be binding inter se.

It appears that no similar attention was given to ad-

versity between the Reservation and the Project. Nor did

the government file pleadings or the equivalent in which it

was explicitly stated that the litigation would bind the

Reservation and the Project inter se. It is clear from the

"See letter of August 7, 1918 from R. G. Withers, U.S. Dept. of

Justice, to Hon. E. S. Farrington, U.S. District Judge. R. 2266-67.

A-54

record that the government did not perceive conflict be-

tween the claim it pressed on the Tribe’s behalf and the

claim asserted for the Project. As Truesdell, the Special

Assistant U.S. Attorney in charge of the case said in 1919,

the government “always had it in mind that there could be

ne conflict of interest between the Reclamation Project

and the Indian reservation.” Ex. U-88, at 4. The small

reservation claim that was asserted could be satisfied by

the return flow from irrigation below the headgate or the

Truckee diversion canal. Id.”

In 1925 the Orr Ditch special master described the reservation

claim as follows:

cultivation? Under similar conditions white men are not satis-

Ex. U-123. And see Ex. U-24. This implies that conflicts between

the two interests were perceived as administrative matters, not

questions for litigation.

A-55

We do mot accept TCID’s suggestion that it became an

adverse party in its own right by participating in the

negotiations that resulted in the Truckee River Agree-

ment, or by signing that agreement, or by the court’s in-

corporation of that agreement into the Orr Ditch final

decree. The government was the plaintiff in Orr Ditch. It

never relinquished or limited its representation of the

Project’s interests. The final decree confirms the Project’s

water rights in the government’s name. TCID’s negotia-

tions with the government and other parties could not

alone satisfy the requirement that adversity be explicitly

established on the record, by pleadings.

Since there was no adversity under the pleadings be-

tween these two interests, the question is then whether

the fishery claim asserted here was actually or necessarily

litigated in Orr Ditch. The district court found “no evi-

dence in this case that a Winters implied and reserved

water right for fishery purposes was actually ever litigated

in the course of the Orr Ditch proceedings.” Finding No.

25, R. 5600. We agree with this finding. We must there-

fore reverse the judgment as to TCID.

We realize that this judgment results in hardship for

TCID and its members. However, this is mitigated by sev-

eral factors. First, TCID obtains water from two rivers,

the Carson and the Truckee. Even if the Tribe succeeds

in establishing its entitlement to substantial additional

Truckee River water, it is possible that much of the

TOCID’s need could be satisfied by Carson River water.

Second, the Newlands Project is relatively inefficient in its

use of water. See Pyramid Lake Tribe v. Morton, supra,

A-56

354 F.Supp. at 257. Improvements in water storage and

distribution could result in substantial efficiencies to amel-

iorate any hardship to TCID. Third, TCID’s right to water

is based only in part on the government’s representation

of TCID’s interests in Orr Ditch. Their rights are also

founded on contracts wit) the government.” If the gov-

ernment breaches its contractual obligations to TCID ard

its members, traditional remedies may afford protection.

Finally, TCID’s hardship was avoidable. Either the gov.

ernment or TCID could have taken steps to assure that

adversity was clearly established on the record, and they

failed to do so.

Accordingly, we reverse the district court’s judgment

insofar as it dismissed the plaintiffs’ complaint against

TCID

*TCID’s right to water is based im part on its 1926 contract with

the government. In that contract the government agreed to deliver

water to TCID for distribution to Project water users. Individual

water users represented by TCID in this litigation have their own

tain quantities of water. Other water users’ rights are based on con-

tracts with TCID which, at least in some cases, are approved by

the government. See R. 1142-48. Though Project water users’ rights

originate from contracts, this does not mean that they have no

interest in them. See Ickes v. Fox, 300 U.S. 82, 57 . C.

36, 81 L.Ed. 388 (1937); Trelease, Reclamation Water Rights,

supra, 32 Rocky Mt.L.Rev. 477-81; 2 Waters and Water Rights,

supra, § 117.3, at 176-77. Nevertheless, it is clear that the water

users represented by TCID trace their rights to the contracts men-

tioned above.

A-57

III. Ratification.

The defendants argue that Congress has ratified the

Orr Ditch decree, and go it must be given preclusive

effect. The district court found that Congress ratified the

taking of the fishery, primarily by passing the Washoe

Project Act of 1956, 43 U.S.C. 5 614 et seg. There Congress

noted the deterioration of the Pyramid Lake fishery “due

in large measure to the construction by the Federal Gov-

ernment of the Newlands Project.” The Washoe Project

Act authorized efforts to restore the fishery. The district

court held that this (1) confirmed “Congress’ awareness of

past acts;” and (2) ratified those acts “by its attempts to

restore the fishery.”

Ratification occurs where Congress adopts prior acts

with “full knowledge of the relevant facts.” United States

v. Georgia-Pacific Co., 421 F.2d 92, 102-03 n.28 (9th Cir.

1970). See Shoshone Tribe v. United States, supra, 299

U.S. 476, 57 S.Ct. 244, 81 L.Ed. 360; United States v.

Creek Nation, supra, 295 U.S. 103, 55 S.Ct. 681, 79 L.Ed.

1331. The legisiative history of the Washoe Project Act

shows Congress was aware: (1) that the fishery had de-

teriorated; and (2) the federal government’s development

of the Newlands Project was largely the cause of the

deterioration. There is no indication that Congress knew

that the Tribe might have a reserved water right for the

fishery or that the right was extinguished in Orr Ditch.

Further, nothing in the record or the legislative history

suggests that by authorizing efforts to restore the fishery

Congress intended to sanction federal actions that had

contributed to the fishery’s destruction. Accordingly, we

A-58

hold Congress has not ratified the government’s actions

in the Orr Ditch proceedings.

IV. Other Arguments.

The parties make a number of other arguments which

were not accepted by the district court. We deem it un-

necessary to discuss them in detail. We reject the Tribe’s

argument based on section 16 of the Indian Reorganiza-

tion Act. We cannot agree that the government’s handling

of the Reservation’s interests in the Orr Ditch case con-

stituted a “disposition” of tribal assets within the mean-

ing of that section. See discussion at 1300 supra. We also

reject TCID’s argument that the Tribe is bound by the

Orr Ditch decree because in 1974 it sought to enforce

that decree against the defendants. TCID’s argument is

based on the much-critized former Equity Rule 37. See 3B

Moore’s Federal Practice, supra, J 24.1611] at 591; Spiller

v. St. Louis d San Francisco R. R., 14 F.2d 284 (8th Cir.

1926), rev’g North American Co. v. St. Louis d San Fran-

cisco R.R., 288 F. 612 (D.Mo.1922). No comparable pro-

vision was included in the revised Federal Rules of Civil

Procedure. Compare Spangler v. United States, 415 F.2d

1242 (9th Cir. 1969). We see no inequity in permitting the

Tribe to seek to enforce the Orr Ditch decree against the

defendants while also seeking additional water rights in

this proceeding. By intervening the Tribe did not assert

the validity of the Orr Ditch decree against itself. Com-

pare Davis v. Wakelee, 156 U.S. 680, 691, 15 S.Ct. 555, 559,

39 L.Ed. 578 (1895). Rather, it attempted to hold the de-

fendants to rights confirmed in the Orr Ditch decree. This

is not inconsistent with its claim for additional waters. See

Embry v. Palmer, 107 U.S. 3, 2 S.Ct. 25, 27 L.Ed. 346

(1882).

A-59

V. Conclusion.

We conclude that the Orr Ditch proceedings withstand

the plaintiffs’ collateral attack, in the main. Notwithstand-

ing the government’s questionable representation of the

Tribe’s interests, there is sufficient reason for us to give

the decree preclusive effect with respect to the Orr Ditch

defendants, their successors, and subsequent appropriators

who reasonably relied on the decree.

We reach a different conclusion with respect to the

Truckee-Carson Irrigation District. Its interests were

represented by the government in the Orr Ditch proceed-

ings in such a way that there was no opportunity to adjudi-

cate its interests as against the Tribe’s. We therefore re-

mand this case to the district court to adjudicate priorities

between those interests.

On remand the district court must determine whether

the Tribe is entitled to a water right for its fishery. We

express no opinion on that question. If the Tribe is

adjudged to have such a right, it is of course limited to

a quantity of water “necessary to fulfill the purposes of

the reservation, no more.” Cappaert v. United States,

supra, 426 U.S. at 141, 96 S.Ct. at 2071. And, of course,

any additional water due the Tribe must come from water

rights decreed to the government in Orr Ditch. Neither

the Tribe nor the government may expand its water rights

beyond the limits of government rights decreed in the orig-

inal proceeding. We also believe it important to bear in

mind the nature of the right the Tribe seeks in this liti-

gation. As the Tribe points out in its brief:

480

The fishery right] does not require the delivery of

fixed quantities each and every day, month, season or

year. Unlike the other kind of water right, the

water required for fishery purposes will have its least

impact in dry years when water is most scarce. In dry

years the water would not do [the fishery] any good.”

Tribe’s Opening Brief at 21-22.

Given this flexibility in the right the Tribe seeks, we

are hopeful that on remand the district court and the

parties can formulate a solution that will minimize hard-

ships on all water users.

AFFIRMED IN PART, REVERSED IN PART, AND

REMANDED.

A-61

Appendix B

SCHROEDER, Circuit Judge, concurring in part and

dissenting in part:

I concur in all of the majority opinion except that por-

tion which permits a partial reopening of the Orr Ditch

litigation to consider the claim of the Tribe against the

Truckee-Carson Irrigation District. My partial dissent is

with respect and regret, for the fate that has befallen the

once beautiful Pyramid Lake is indeed sorrowful.

I dissent because the majority opinion creates an excep-

tion to the principles of res judicata applicable to general

water adjudications, and the effect of today’s ruling may

have disruptive repercussions beyond the shores of Pyra-

mid Lake.

The majority opinion, correctly in my view, rejects the

broad contention of the government that its own, belatedly

perceived, conflict of interest in representing both the Irri-

gation District and the Tribe requires the Orr Ditch decree

to be reopened completely. In the bygone era in which

irrigation and reclamation ranked supreme, the conflicting

relationship between those interests and possible other

reserved Indian water rights was not clearly perceived. The

majority properly recognizes, as the district court found,

that there could have been no public perception of any

impropriety in the government’s conduct of this litigation

which would preclude reliance upon the decree. See Re-

statement (Second) of Judgments § 86 (Tent. Draft No. 2,

1975).

The majority’s limited reopening is more narrowly

perched upon the principle of “adverseness under the

pleadings,” a concept most commonly applied to co-parties

A-62

in tort litigation. The majority applies that concept here

because the claims of the Tribe and TCID were both set

forth in the government’s complaint. The majority con-

cludes that those claimants are bound only by matters

which were actually litigated, and not as to any claims

which could or should have been determined in that

litigation.

This action, however, as the district court found and the

majority accepts, was intended by all concerned to be a

“general all inclusive water adjudication suit which sought

to adjudicate all rights and claims in and to waters of the

Truckee River and its tributaries . . . to the end that its

decree would determine the relative rights of the parties

thereto.” The government filed the action in order to de-

termine all prior rights to the water and to establish the

amount of water available to TCID. In such litigation, the

fact that claimants may be denominated plaintiffs or de-

fendants has no effect on the application of res judicata.

All are adverse to each other.

This principle has been repeatedly observed by courts

of the western United States in dealing with similar ad-

judications. For example, the Idaho Supreme Court in

Morgan v. Udy, 58 Idaho 670, 79 P.2d 295 (1938), was

faced with the contention that parties to an adjudication

had not been adversaries and thus principles of collateral

estoppel as opposed to res judicata applied. The court

quoted from Frost v. Alturas Water Co., 11 Idaho 294,

301, 81 P. 996, 998:

. . . in the settlement of cases of this character every

user of water on the stream and all of its tributaries

in litigation are interested in the final award to each

A-63

claimant. * * * Every claimant of the water of either

stream * is interested in a final adjudication of all

the claimants of all the waters that flow to the claim-

ants at the lower end of the stream after its junction.

In other words, in my view of the question presented

by the demurrer, it matters but little who are plain-

tiffs and who are defendants in the settlement of cases

of this character; the real issue being who is first in

right to the use of the waters in dispute.’ (Italics

ours.)

58 Idaho at 681, 79 P.2d at 299. In an equitable quiet title

action very similar to the Orr Ditch litigation, the Nevada

Supreme Court decided whether non-appealing defendants

were “adverse” parties entitled to be served with a notice

of appeal. Pacific Live Stock Co. v. Ellison Ranching Co.,

52 Nev. 279, 286 P. 120 (1930). The court concluded that

they were “adverse,” stating:

In a suit to quiet title to water rights, such as this,

the main purpose is to determine the respective rights

of the parties to the use of the water. A decree which

leaves the controversy between the parties unsettled,

unadjudicated, undetermined, and subject to future

litigation, defeats the very purpose for which the

action is brought. 3 Kinney, Water Rights (2d ed.)

§ 1557.

Id. at 296, 286 P. at 123.

The majority decision here, of course, rests not only

upon the form of the pleadings but upon the fact that the

government, at least formally, was representing both the

Irrigation District water users and the Tribe. This, how-

ever, as we all agree, was not generally understood to have

involved any impropriety during the course of the Orr

A-64

Ditch litigation. The users of the Truckee-Carson Irriga-

tion District waters, like the Orr Ditch defendants, have

relied on the finality of the Orr Ditch decree for nearly two

generations. The majority does not suggest, nor did the dis-

trict court find, that the TCID users were any more aware

of improprieties in the government’s conduct than the other

users who were parties to the action.

As the majority points out, the hardship of today’s rul-

ing on TCID may be eased by the availability of other

remedies. In such circumstances, today’s ruling may well

be viewed as a fair and equitable redress for the loss of

fishery rights and the damage done to Pyramid Lake.

However, the applicability of today’s ruling to other water

adjudications involving Indian interests was not briefed

in this case and is not known to this panel. I understand

today’s ruling to apply only to a situation in which the

government, ir the complaint, asserted claims on behalf of

an Indian tribe as well as other water users who were not

parties to the litigation. No claim has been made that this

situation is unique.“

The underlying conflict between pursuit of reclamation

interests and reserved Indian rights has been the sub-

*Many water adjudications undoubtedly lie outside the scope of

For example, the Kent decree, Hurley v. Abbott, No.

Ct.3rd Judicial Dist., Maricopa Co. (1910) un-

distribution in Central Arizona. That decree has

rise

11400

ie

E

H

fi

15

Before the Subcomm. on Elections of the Senate Judiciary Comm.,

Ist Sess. (1971) (statement of W. H. Veeder). It is

today’s decision, however, since the gov-

land owners within the district parties

0

H

A-65

ject of calls for congressional action. E. g., Chambers,

Discharge of the Federal Trust Responsibility to Enforce

Legal Claims of Indian Tribes: Case Studies of Bureau-

cratic Conflict of Interest, 91 Cong., 2d Sess. (Comm. Print

1970) Study of Administrative Conflicts of Interest in the

Protection of Indian Natural Resources, Subeomm. on Ad-

min. Prac. and Procedure of the Senate Comm. on the

Judiciary ; Veeder, Federal Encroachment on Indian Water

Rights and the Impairment of Reservation Development,

91 Cong., Ist Sess. (Comm. Print 1969) Toward Economic

Development for Native American Communities, Subcomm.

on Economy in Government of the Joint Economic Comm.

In my view that approach is preferable to one which erodes

long standing principles of finality in water adjudications.

A-66

Appendix C

United States Court of Appeals

For the Ninth Circuit

Nos. 78-1115/1493

United States of America,

Plaintiff-A ppellant,

and

Pyramid Lake Paiute Tribe of Indians,

Plaintiff-Intervenor-A ppellant,

vs.

Truckee-Carson Irrigation District, State of Nevada,

Sierra Pacific Power Company, City of Washoe, and

Washoe County Treasurer, Trustee, Albert A. Alcorn, and

Approximately 17,000 Other Individually Named Persons,

Firms, Partnerships, and Corporations,

Defendants-Appellants.

[Filed Jan. 5, 1982

Appeal from the United States Distriet Court

for the District of Nevada

Before: TUTTLE*, SKOPIL, and SCHROEDER,

Cireuit Judges

A-67

The opinion in the above-named case, currently pub-

lished at 649 F. 2d 1286, is ordered amended as follows:

1. In the second complete paragraph at 649 F.2d at

1294, the sentence: “Section 4 of that Act declared that

‘restoration of the Pyramid Lake Trout Fishery to its full

potential value is deemed to be of national interest and

importance” is ordered deleted. The following is ordered

substituted: “The House Report of that Act declared that

‘restoration of the Pyramid Lake Trout Fishery to its full

potential value is deemed to be of national interest and

importance. H.R. Rep. No. 2055, 84th Cong., 2d Sess. 4-5,

reprinted in 1956 U.S. Code Cong. & Ad. News 3755, 3758.”

2. At the end of the third complete paragraph at page

1294, the citation to 15 C.F.R. § 17.11 at 87-88 (1977) is

ordered changed to 50 C.F.R. § 17.11 at 87-88 (1977).

3. At page 1295, at the end of the paragraph which

begins on Page 1294, the last word in the paragraph is

ordered changed to “1961” from “1969”.

4. At page 1299, the last citation sentence in the para-

graph beginning on page 1298 is ordered deleted. The

correct citation is “See 2 Waters and Water Rights § 116.1

at 162 n.20 (R. Clark ed. 1967).”

5. At the end of footnote 13 at- 649 F.2d at 1304, the

following should be added:

“The level of scrutiny set forth in Restatement

Second § 86(e) is appropriate here. The Federal-In-

dian relationship is long established in the law and

involves fiduciary obligations. See e.g., Cherokee Na-

tion v. Georgia, 30 U.S. (5 Pet.) 1, 17 (1931); Navajo

Tribe v. United States, 364 F. 2d 320 (Ct. Cl. 1966). In

A-68

class actions, by contrast, the relation between the

class and the class representative is transitory. Out-

side the context of the action, there is no legal relation.

The same is true in actions by most government rep-

resentatives, where the only relation is between a

citizen and the government agency, entailing no legal

relation. See, e.g., Consumers Union v. Consumer

Product Safety Comm., 590 F.2d 1209 (D.C. Cir. 1978) ;

Southwest Airlines Co. v. Texas Int'l Airlines, Inc.,

supra, 546 F.2d at 84.”

6. At the end of the sentence beginning on page 1307

and ending on page 1308, the following is ordered added:

“If the Orr Ditch defendants were aware of the gov-

ernment’s failure to fulfill its responsibility to the

Tribe, and therefore did not reasonably rely on that

representation, giving preclusive effect the decree

would deny the Tribe due process. If the Orr Ditch

defendants were without knowledge, enforcing the

decree would not contravene due process.”

The following sentence should begin a new paragraph.

7. The following is ordered added to the end of the

first complete paragraph on page 1309:

“Accordingly, the Tribe’s water right cannot be greater

than the rights decreed to the government in Orr

Ditch. The government’s priority is superior to the

rights of subsequent appropriators. Yet the Orr Ditch

decree defines the maximum limits of any rights the

Tribe may establish on remand. Subsequent appro-

priators will be no better nor worse off if the Tribe

takes more water than they were when TCID was tak-

ing its full share.”

A-69

8. At page 1313, the first word of the fourth line of

the indented quotation in the left-hand column should be

“every” rather than “the”.

9. New footnote 20 is ordered added to the opinion.

The signal to the footnote should be placed at the end of

the second complete paragraph on page 1309. Subsequent

footnotes are ordered renumbered. New footnote 20 will

state:

“Antagonistic parties are not necessarily adverse

parties. Adversity is a legal concept. It exists only

if parties have had an opportunity of litigating be-

tween themselves the correctness of a determination

which is the basis of the judgment between them.

Restatement of Judgments, supra, § 82, Comment a.

The formal requirements of setting up adversity serve

the purpose of notifying the parties and the court that

a binding judgment between the parties is intended.

These formal requirements were not followed here.

Neither the court nor the government nor the Tribe

nor TCID was ever put on notice that a binding judg-

ment was intended between TCID and the Tribe. Such

notice might have suggested to the Tribe that it must

seek to intervene, and to the court that intervention

might be proper. See New Merico v. Aamodt, supra,

537 F.2d at 1106. Because of the important function

served by the adversity requirement in this situation,

we decline to suspend its application. The fact that

TCID and the Tribe may have had antagonistic inter-

ests is irrelevant.”

A-70

Appendix D

United States Court of Appeals

For the Ninth Circuit

No. 78-1115/1493

United States of America,

Plaintiff-Appellant,

and

Pyramid Lake Paiute Tribe of Indians,

Plaintiff-Intervenor-Appellant,

vs.

Truckee-Carson Irrigation District, State of Nevada,

Sierra Pacific Power Company, City of Washoe,

and Washoe County Treasurer, Trustee, Albert

A. Alcorn, and Approximately 17,000 Other

Individually Named Persons, Firms,

Partnerships, and Corporations,

Defendants-Appellees.

Appeal from the United States District Court

for the District of Nevada

[Filed March 11, 1982]

ORDER

Before: TUTTLE,* SKOPIL, and SCHROEDER,

Circuit Judges

The Honorable Elbert Parr Tuttle, Senior Circuit Judge, United

States Court of Appeals for the Eleventh Circuit, sitting by desig-

nation.

A-71

The panel has voted to deny the petitions for a panel

rehearing. Judges Tuttle and Skopil have voted to denv a

panel rehearing. Judge Schroeder would grant a panel

rehearing.

The full Court has been advised of the suggestion for

rehearing en banc. A judge in active service requested

that a vote be taken on the suggestion for rehearing

en banc, pursuant to Fed.R.App.P. 35(b). A vote of all

active judges was taken and a majority voted against

en banc rehearing.

The petition for rehearing is denied and the suggestion

for rehearing en banc is rejected.

Judges Anderson and Hug took no part in the consider-

ation or disposition of this appeal.

A-72

Appendix E

In the United States District Court

For the District of Nevada

Civil No. R-1987-JBA

United States of America,

Plaintiff,

and

Pyramid Lake Paiute Tribe of Indians,

Plaintiff-Intervenor,

vs.

Truckee-Carson Irrigation District, State of Nevada,

Sierra Pacific Power Company, City of Reno,

City of Sparks, County of Washoe and

Washoe County Treasurer, Trustee,

Albert A. Alcorn, and approximately 17,000

other individually named persons, firms,

partnerships and corporations,

Defendants.

[Filed Dec. 12, 1977]

MEMORANDUM DECISION

This memorandum will attempt to amplify and expound

upon several areas of the court’s reasoning underlying its

ultimate Findings of Fact and Conclusions of Law, filed

contemporaneously herewith, and also to meet and answer

several of the principal contentions raised by plaintiff

and the intervenor.

A-73

I.

THE RECLAMATION AC TS

As stated in the Findings of Fact and Conclusions of

Law, this court places primary reliance upon the passage

of the 1902 Reclamation Act. In this regard, Henkel v.

United States, 237 U.S. 43 (1915), is enlightening. In

Henkel, the United States brought an action in ejectment

seeking to recover certain lands in the Blackfeet Indian

Reservation. These lands were to be used in connection

with the proposed St. Mary Reservoir of the United States

Reclamation Service. The defendants were members of the

Piegan Tribe and occupied the lands and had built im-

provements thereon. In 1906 the defendants executed a

document in which they undertook to relinquish all claims

to the lands in question. The conditions of this surrender

were that the defendants were to be paid $7,500.00 for

their improvements and would be subsequently allowed to

select allotments of equal area from the unoccupied lands

of the Blackfeet Indian Reservation. In 1907 the defen-

dants were paid $7,500.00. In their answer the defendants

alleged that the allotting officers had refused to allot the

lands selected by the defendants and that, under protest,

the defendants had been allotted lands elsewhere, which

lands they offered to surrender if the lands selected by

them would be allotted to them.

In the words of the court, the defendants contended:

. . „ that no statute of the United States has con-

ferred authority upon the government or its officers

to acquire the lands described by the relinquishment

from the Henkels, as above set forth. Such action, it

is contended, would amount to an act of bad faith

A-74

upon the part of the government toward these Indians

in view of their established right in these lands; and

to permit the reclamation statute of 1902 to have such

effect, it is insisted, would be virtually to permit it

to repeal previous acts of Congress disposing of lands

for the benefit of the Indians.”

In order to answer this contention, the court reviewed “‘the

previous status of the Indians and what Congress has

undertaken to do by legislating in their behalf.” After

reviewing the Allotment Act of February 8, 1887, the court

focused upon an agreement made with the Indians on

September 28, 1895, and approved by the Act of June 10,

1896. Under this agreement it was provided that no allot-

ments of land would be made on the Blackfeet Reservation

and that the land would be held by the Indians as a com-

munal grazing ground. The agreement also provided that

any Indian member could file a description of land fenced

in by him which would give that member the right to take

such land when allotments were made. The agreement also

contained a provision recognizing a reserved right of the

government to use the lands upon compensation being

made therefor for certain described public improvements.

It was under this 1895 agreement that the defendants

had occupied their lands when the Reclamation Act of 1902

was passed. After reviewing the broad powers delegated

to the Secretary of the Interior under the Act, the court

stated:

“The reclamation projects undertaken by the govern-

ment are very extensive and cover many states; and

they must involve in their construction the flooding of

A-75

lands in connection with dams designed to hold water

for such purposes; and must necessarily include much

territory which is included in Indian reservations. This

situation was of course well known to Congress when

it passed the reclamation act, and we cannot doubt, in

view of the broad authority conferred by §§7 and 10,

above quoted, that it was the purpose of Congress to

give the Secretary of the Interior the right to acquire

such rights as are here involved, when necessary for

reclamation purposes. In carrying out the purposes of

the act, the Secretary of the Interior is authorized to

acquire any rights or property necessary for that pur-

pose, and to acquire the same either by purchase or

by condemnation. He is specifically authorized to per-

form any and all acts necessary and proper for the

purpose of carrying into effect the provisions of the

act. Authority could hardly have been conferred in

more comprehensive terms, and we do not believe that

it was the intention of Congress, because of the Indians

right of selection of lands under the circumstances

here shown, to reserve such lands from the operation

of the act. To do so might defeat the reclamation

projects which it was evidently the purpose of Con-

gress to authorize and promote.”

This recognition by the Supreme Court, in 1915, of the

overriding national importance of the Reclamation Act

confirms this court’s belief that it was the passage of that

Act that necessarily created the conflict of purposes in

the Department of the Interior. As a result of the passage

of the Reclamation Act, the Secretary instituted Orr Ditch

and the evidence supports the finding that the primary

purpose of Orr Ditch was to secure the water rights for

the reclamation project. Once instituted, the United States,

A-76

as guardian for the Pyramid Lake Paiute Indians, also

sought to secure water rights for the Indians under the re-

served rights doctrine.

This representation of the Indians by the United States

was in full accord with Heckman v. United States, 224 U.S.

413 (1912). In Heckman the United States brought an

action seeking to cancel certain conveyances, executed by

members of the Cherokee Tribe, of lands allotted to thei

in severalty. The statute under which the allotments were

made, Act of July 1, 1902, contained a provision that the

allotted lands were inalienable for a period of twenty-five

years. It was not disputed that the conveyances made were

in violation of this provision. The argument was made that

there was a defect of parties because of the Indian

grantors’ absence from the case. The Supreme Court met

this contention with the following language:

“The argument necessarily proceeds upon the assump-

tion that the representation of these Indians by the

United States is of an incomplete or inadequate char-

acter ; that although the United States, by virtue of the

guardianship it has retained, is prosecuting this suit

for the purpose of enforcing the restrictions Congress

has imposed, and of thus securing possession to the

Indians, their presence as parties to the suit is essen-

tial to their protection. This position is wholly un-

tenable. There can be no more complete representation

than that on the part of the United States in acting

on behalf of these dependents, whom Congress, with

respect to the restricted lands, has not yet released

from tutelage. Its efficacy does not depend upon the

Indians acquiescence. It does not rest upon convention,

nor is it circumscribed by rules which govern private

relations. It is a representation which traces its source

A-77

to the plenary control of Congress in legislating for

the protection of the Indians under its care, and it

recognizes no limitations that are inconsistent with

the discharge of the national duty.”

This language of the court, issued just one year before

Orr Ditch was commenced, menifestly authorized the

United States to represent the Indians in the Orr Ditch

case.

The United States was therefore properly in the case

in its own capacity seeking water rights for the benefit of

the reclamation project and in its representative capacity

for the Indians. This situation squarely presented the De-

partment of the Interior, the Bureau of Reclamation and

the Bureau of Indian Affairs, with the problem of having

to deal with a limited quantity of water out of which to

satisfy two claims—the project rights and the Indians’

rights. Faced with this apparent and foreseeable conflict

of purposes, the Secretary of the Interior necessarily

looked to his delegation of powers from Congress. Two

provisions of the Reclamation Act of 1902 delegated to

the Secretary very broad powers. Section 7 of that Act

provided, in pertinent part:

“Sec. 7. That where in carrying out the provisions of

this Act it becomes necessary to acquire any rights or

property, the Secretary of the Interior is hereby au-

thorized to acquire the same for the United States by

purchase or by condemnation under judicial process,

”

Section 10 of the same Act provided:

“Sec. 10. That the Secretary of the Interior is hereby

authorized to perform any and all acts and to make

A-78

such rules and regulations as may be necessary and

proper for the purpose of carrying the provisions of

this Act into full force and effect.”

Still later, by the Act of April 21, 1904, the Secretary of

the Interior was delegated powers specifically referring to

the Pyramid Lake Indian Reservation. Section 16 of that

Act provides, in pertinent part:

“Sec. 26. That in carrying out any irrigation enter-

prise which may be undertaken under the provisions

of the reclamation act of June seventeenth, nineteen

hundred and two, and which may maxe possible and

provide for, in connection with the reclamation of

other lands, the reclamation of all or any portion of

the irrigable lands on the Pyramid Lake Indian Reser-

vation, Nevada, the Secretary of the Interior is hereby

authorized to reclaim, utilize, and dispose of any lands

in said reservation which may be irrigable by such

works in like manner as though the same were a part

of the public domain; Provided, That there shall be

reserved for and allotted to each of the Indians be-

longing on the said reservation five acres of irrigable

lands. The remainder of the lands irrigable in said

reservation shall be disposed of to settlers under the

provisions of the reclamation Act:

The delegation of these powers to the Secretary of the

Interior evidences a determination, made by Congress,

that if lands, and specifically by the Act of April 21, 1904,

lands of the Pyramid Lake Indian Reservation, were

needed in order to carry out the purposes of the reclama-

tion act, such lands were to be acquired by the Secretary.

It was Congress’ determination that Indan lands, if neces-

sary to be acquired to carry out the purposes of the Recla-

A-79

mation Act, were secondary when conflicting with the

purposes of the Reclamation Act. Congress’ authority to

deal with Indian lands is beyond question. As stated in

United States v. Southern Pacific Transp. Co., 543 F.2d

676 (9th Cir. 1976):

“Congress has plenary authority to control use, grant

adverse interests or to extinguish the Indian title.”

543 F.2d at 687.

In this case, Congress, by passing the Reclamation Acts of

1902 and 1904, delegated to the Secretary of the Interior

that authority to deal with Indian lands when such were

necessary to carry out the purposes of the Reclamation Act.

It should also be emphasized that the establishment of

the Pyramid Lake Indian Reservation by Executive Order

did not thereby convey to the Indians any compensable

interest in the lands. Sioux Tribe v. United States, 316

U.S. 317 (1942). The extinguishment of the alleged fishery

right did not subject the United States to any obligation

of paying compensation. Congress has recognized the loss

of the fishery and recompensed the Indians for this loss

through various acts and appropriations as indicated in

Finding No. 30 of the Findings of Fact and Conclusions of

Law. Specifically, this recognition was best expressed in

the passage of the Washoe Project Act, 43 U.S.C. § 614,

et seq. In 43 U.S.C. § 614(c) Congress included “facilities

to permit increased minimum water releases from Lake

Tahoe and restoration of the Pyramid Lake fishery.” The

legislative history of the Act confirms this recognition. In

House Report No. 2055 the Committee on Interior and In-

sular Affairs states:

A-80

“The present condition of Pyramid Lake is due in large

measure to the construction by the Federal Govern-

ment of the Newlands project, one of the first Federal

reclamation projects, and by irrigation works for the

Pyramid Lake Indian Reservation; yet, no compensa-

tory measures to maintain the fishery of the lake were

ever taken by the Federal Government. It is hoped

that, through establishment of a fish hatchery, increase

of flows in the Truckee River and channel improve-

ments at the mouth of the river, that a trout fishery

can be restored. Restoration of the Pyramid Lake trout

fishery to its full potential value is deemed to be of

national interest and importance, because, among other

things, of the adverse results of previous Federal par-

ticipation in the development of the waters affecting

the fishery of the lake.”

1956 U.S. Cong. & Admin. News, p. 3758.

This language confirms Congress’ awareness of past acts

and its ratification of those acts by its attempts to restore

the fishery.

The language of Judge Chambers in his concurrence in

United States v. Ahtanum Irrigation District, 236 F.2d 321,

342 (9th Cir. 1956) seems to be especially appropriate. He

states:

“Even though they may have known of the Winters

decision, those who have a duty to act today may make

mistakes which, in the course of future events, may

indicate bad judgment. If the 1908 agreement today

works a great injustice, I think that it is for Congress

to correct the unfairness if such there be by develop-

ing other irrigable land for the Indians involved.”

A-81

II.

THE INDIAN NON-INTERCOURSE ACT

25 U.S.C. 5 177, otherwise known as the Non-Intercourse

Act, provides in pertinent part:

“$177. Purchases or grants of lands from Indians.

No purchase, grant, lease, or other conveyance of

lands, or of any title or claim thereto, from any Indian

nation or tribe of Indians, shall be of any validity

in law or equity, unless the same be made by treaty

or convention entered into pursuant to the Consti-

tution... .”

From this statute the Tribe argues that since Indian title

can be extinguished only with the consent of Congress, then

a final judgment adjudicating Indian property rights ad-

verse to the Indians’ interest which may subsequently be

found to be erroneous should not be given res judicata

effect.

DISCUSSION

From the language of the Act, it would appear that the

Tribe would have to prove at least four things in order

to render the Act applicable :

1. that there has been a “purchase, grant, lease,

or other conveyance”

2. “of lands”

3. “from any. . tribe of Indians,”

4. which was without Congress’ consent.

Regarding the first element, whether there has been a

“conveyance” the first question to be decided is the type

or source of actions that are alleged to be a “conveyance.”

It would appear that the Orr Decree was the effective

“conveyance” of the right. Underlying the Orr Decree was

A-82

the Truckee River Agreement entered into by the parties.

The determinative question therefore is whether the Orr

Decree and/or the Truckee River Agreement was a con-

veyance’’ within the meaning of the Act.

The best authority on thie question is the Ahtanum duet

of cases. The first case, United States v. Ahtanum Irriga-

tion District, 236 F.2d 321 (9th Cir. 1956), was a suit

brought by the United States as trustee for the Indians to

quiet title to the Indians’ right to use the waters of the

Ahtanum Creek which allegedly were reserved by treaty.

The court below held that the Treaty of June 9, 1855, which

set aside the Indian Reservation for the Yakimas, did not

reserve any water rights for the Indians. The Court of

Appeals reversed this holding, saying that the Treaty did

reserve such water rights by reason of Winters v. United

States, 207 U.S. 504 (1908). The question then became

what was the quantity of water rights reserved. In this

regard the crucial question concerned the validity of a

1908 agreement between Chief Engineer Code and a group

of white settlers. Code had been instructed to go to the

reservation for the purpose of bringing about a settlement

of the rights to the use of the Ahtanum Creek. The agree-

ment reached was that the white settlers were to get 75%

of the flow and the Indian users would get the remaining

25% of the flow. The agreement was signed by Code on

behalf of the United States and was approved by the First

Assistant Secretary of the Interior. The crucial question

came down to whether the Secretary had the power to make

this agreement. The Court, after reviewing the statutory

powers of management vested in the Secretary, held that

the above agreement “was the sort of thing which the Sec-

A-83

retary was authorized to do by the grant of general

powers of supervision and management, he therefore had

the power to make the 1908 agreement.” supra, p. 338. The

court reversed the dismissal of the case and remanded to

determine and adjudicate the extent of the rights of the

respective parties during which the defendants must be

required to show and disclose their rights, titles and

priorities.

On remand, the case was referred to a special master

who concluded that the 1908 agreement was an effective

conveyance of 75% of the waters of Ahtanum Creek. The

master also construed the Court of Appeals language to

mean that the rights of the defendants were as great as

their needs and therefore concluded that the government

had turned over en masse the 75% of the flow unrelated to

any particular parcel of land and unrelated to proof of

water rights under Washington law.

In dealing with the conveyance question, the Court of

Appeals in the second case, United States v. Ahtanum

Irrigation District, 330 F.2d 897 (9th Cir. 1964), stated:

„This conclusion of the master that the agreement of

1908 operated as an instrument of conveyance whereby

certain waters held by the United States in trust for

the Indian tribe were conveyed to the other parties to

the agreement, was rejected by the district judge

when the master’s report came up before him on ex-

ceptions thereto. The judge held that the agreement

was neither a conveyance nor a contract to convey an

interest in the water rights of the Ahtanum Creek

saying: ‘In my opinion the most reasonable charac-

terization to be placed upon the 1908 agreement is that

it was an agreement whereby the parties settled a dis-

A-84

pute as to their respective water rights in the creek

and as such is similar in legal effeci to the well known

‘boundary line agreement.“

0 0 oe

“In thus disagreeing with the master’s version of the

1908 agreement the judge was eminently correct.”

Applying the above to our case, it is apparent that the

Orr Decree was based in part upon the Truckee River

Agreement (TRA). The TRA was entered into by the

United States on behalf of the Tribe, and was approved

by the Interior Department and the Bureau of Indian

Affairs, with legal advice. In contrast, the 1908 Ahtanum

agreement was entered into without legal advice and with-

out consulting the Indians. The TRA was also an agree-

ment which “settled a dispute as to their respective water

rights” in the Truckee River. If the 1908 Ahtanum agree-

ment is not a “conveyance,” it is impossible to conceive

that there was a “conveyance” in this case.

Tribal counsel, in his final argument, may have provided

a little insight into the proper definition of a “conveyance”

when used under the Non-Intercourse Act. In discussing

the Motion to Strike Affirmative Defenses, Mr. Peleyger

stated:

“So my answer to that question [whether there was a

conveyance] is that we are not contending that there

has been any conveyance as that term is ordinarily

used, but rather that the statute which uses the term

conveyance bars the kinds of affirmative defenses that

are the subject of the motion to strike.” [p. 9809]

It must also be pointed out that in Ahtanum I the court

upheld the power of the Secretary to enter into the agree-

A-85

ment based upon the general powers of management and

supervision. In our case the power of the Secretary to

enter into the TRA is not based upon general powers, but

rather a specific grant found in §7 of the Reclamation Act

of 1902, authorizing the Secretary to acquire any rights or

property when the same becomes necessary in carrying out

the provisions of the Act and even more specifically in the

Act of April 21, 1904, & 26, of which specifically refers to

the Pyramid Lake Indian Reservation.

Dealing with the second requirement, “of lands,” the

Tribe cites North Side Canal Co. v. Twin Falls Canal Co.,

12 F.2d 311 (D. of Idaho), in which the court stated:

Land,“ in a statute of this general nature, must nec-

essarily be given a broad and comprehensive meaning.

“Land,’ in such sense, includes water upon the land,

and water claimed to be appropriated for use in the

development, by irrigation, of the land.”

The Tribe also cites Holmes v. United States, 53 F.2d 960

(9th Cir. 1931), in which the court stated:

“The primary meaning of the word ‘land’ at common

law is ‘any ground, soil or earth whatsoever; as arable,

meadows, pastures, woods, waters, marshes, furzes and

heath.’ 2 Blackstone, Com. 18.”

However, it could also be argued that since §177 was

derived from the Act of June 30, 1834, long before the

concept of the Winters doctrine was recognized, that Con-

gress was concerned with the typical situation wherein

the backward, unschooled Indians were being taken advan-

tage of by the white men in trading or selling their lands

for inadequate prices. The concept that the Indians also

were reserved sufficient water to go along with their lands

A-86

was not conceived of until Winters v. United States, supra,

which was decided in 1908.

The Tribe also has difficulty in meeting the third re-

quirement, that the conveyance be “from any Tribe of

Indians.” The only right possessed by the Indian was their

right of occupancy in the lands, which is a permissive

right granted by the government. It must also be remem-

bered that in the early 1900’s there was indeed a question

as to whether Indians on an executive order reservation

possessed the Winters rights. The fee of the land remained

in the United States and by virtue of the Reclamation Act

of 1902, the Secretary of the Interior was given specific

authority to perform any act necessary to carry out the

provisions of that Act. Since the fee remained in the

United States and the Indians had no compensable interest

in their executive order reservation, the right and author-

ity to deal with the lands was vested in the Secretary, not

the Indians.

The fourth requirement is that the conveyance be made

without consent of the United States. In United States v.

Candelaria, 271 U.S. 432 (1926), an action was brought by

the United States seeking to quiet title to certain lands

alleged to be owned by the Pueblos. The suit was brought

on behalf of the Indians as wards of the United States.

The defendants denied the wardship and set up in bar two

decrees rendered in prior suits brought by the Pueblos to

quiet title in the same lands. The United States responded

that it was not a party to either suit, that it had not autho-

rized either suit and therefore it was not bound by the

two earlier decrees. The court, after reviewing the status

A-87

of the Pueblos and their relationship with the United

States, held that the United States was not barred by the

earlier decrees. The court stated:

“The Indians of the pueblo are wards of the United

States and hold their lands subject to the restriction

that the same cannot be alienated in any wise without

its consent. A judgment or decree which operates

directly or indirectly to transfer the lands from the

Indians, where the United States has not authorized

or appeared in the suit, infringes that restriction. The

United States has an interest in maintaining and en-

forcing the restriction which cannot be affected by

such a judgment or decree.”

The court also noted that the United States had employed

and paid a special attorney to represent the Pueblos. The

court thereby qualified its holding in stating:

. . if the decree was rendered in a suit begun and

prosecuted by the special attorney so employed and

paid, we think the United States is as effectually con-

cluded as if it were a party to the suit.”

In our case the United States instituted, authorized and

appeared and therefore by such actions the United States

has consented to the consequences of the litigation. It

should also be pointed out that the Candelaria court cited

and referred to the Non-Intercourse Act, although it was

not relied upon.

CONCLUSION

The two most critical elements found to be missing or

not supported by the evidence are that there was a “con-

veyance” and that such “conveyance” was done without

A-88

the consent of the United States. The rendering of the Orr

Decree based upon the Truckee River Agreement which

settled the parties’ respective rights in the waters of the

Truckee and its tributaries is simply not a “conveyance”

as that term is used in the Act, and the United States, by

appearing in the suit, has thereby consented to the conse-

quences of the litigation.

III.

THE INDIAN REORGANIZATION ACT

Section 16 of the Indian Reorganization Act, 25 U.S.C.

§ 476, provides in pertinent part:

“In addition to all powers vested in any Indian tribe

or tribal council by existing law, the constitution

adopted by said tribe shall also vest in such tribe or

its tribal council the following rights and powers: To

employ legal counsel, the choice of counsel and fixing

of fees to be subject to the approval of the Secretary

of the Interior; to prevent the sale, disposition, lease,

or encumbrance of tribal lands, interests in lands, or

other tribal assets without the consent of the tribe;

*

The Indian Reorganization Act became law on June 18,

1934. On December 15, 1934, the Pyramid Lake Paiute

Tribe voted to accept the Indian Reorganization Act. On

December 14, 1935, the Pyramid Lake Paiute Tribe or-

ganized and adopted a constitution under Section 16 of

the Indian Reorganization Act which contained similar

provisions as those outlined in Section 16 quoted above.

This constitution was approved by the Secretary of the

Interior on January 15, 1936. The Tribe contends that,

under the unique circumstances of this case, to give res

A-89

judicata effect to a decree that has been approved by

government officials but without the Indians’ consent vio-

lates the policy expressed in the Indian Reorganization

Act.

Section 16 of the Indian Reorganization Act was dis-

cussed in Hynes v. Grimes Packing Co., 337 U.S. 86 (1949).

In Hynes the Secretary of the Interior, on May 22, 1943,

issued Public Land Order 128 which created the Indian

reservation in question and which included the adjacent

tidelands and coastal waters along the entire shore of the

reservation. The principal basis for this Order was § 2

of the Act of May 1, 1936, 49 Stat. 1250, e 254, which was

passed to extend the benefits of the Indian Reorganization

Act to Alaska and to provide for the designation of Indian

reservations in Alaska. In 1946 the Secretary of the In-

terior amended the Alaska Fisheries General Regulations

by adding a subsection which closed the waters in the

reservation to commercial salmon fishing, but which made

an exception for fishing by natives and their licensees. As

a result of this regulation, various fish canning companies

brought an action against the Regional Director for Alaska,

seeking to permanently enjoin the exclusion of their fisher-

men, contending that neither the regulation nor the Public

Land Order had legally closed the fishing in the coastal

waters.

Pertinent to our inquiry, the court first dealt with the

validity of Public Land Order 138. In its inquiry the court

focused upon the scope of the power delegated to the Sec-

retary of the Interior by the Indian Reorganization Act of

June 18, 1934 [referred te as the Wheeler-Howard Act]

A-90

and § 2 of the Act of May 1, 1934. It was contended that

the Secretary’s designation of the reservation was a per-

manent disposition of the property. The court held that

the power delegated to the Secretary under these Acts,

although authorizing his inclusion of the waters in the

Karluk Reservation, such powers did not include the

“power to convey any permanent title or right to the

Indians in the lands or waters of the Karluk Reservation.”

This view was in accord with the status of the Karluk

Reservation and Executive Order Reservations in general.

The court stated:

“An Indian reservation created by Executive Order

of the President conveys no right of use or occupancy

to the beneficiaries beyond the pleasure of Congress

or the President. Such rights may be terminated by

the unilateral action of the United States without legal

liability for compensation in any form even though

Congress has permitted suit on the claim. [citations

omitted]

The court also noted that, under the language of 616

of the Indian Reorganization Act, the argument could be

made that the designation of a reservation is a non-

revocable grant. In rejecting this contention, the court

stated :

“We think, however, in view of the breadth of the

coverage of the Wheeler-Howard Act that this lan-

guage [Section 16 of the Act] would be effective only

where there has been specific recognition by the

United States of Indian rights to control absolutely

tribal lands.”

A-91

Turning to the instant case, it is therefore necessary

for the United States and the Tribe, in order to make

§ 16 of the Indian Reorganization Act applicable, to show

that “there has been specific recognition by the United

States of Indian rights to control absolutely tribal lands.”

The Pyramid Lake Reservation was created by executive

order on December 8, 1859. The creation of this reserva-

tion as such did not thereby convey any compensable inter-

est in the lands to the Indians and rendered the reserva-

tion subject to termination at the will of either the Con-

gress or the President. Sioux Tribe v. United States, 316

U.S. 317 (1942). This executive order certainly did not

recognize any rights in the Indians to control absolutely

the tribal lands in question. There has been no evidence

presented in this case that any treaty exists between the

Tribe and the United States, nor is there any evidence

that the Tribe holds any of the lands or claimed water

rights involved in this action by virtue of any patent or

other conveyance from the United States. In short, there

is no evidence in this case which would support a finding

that the United States has ever specifically recognized in

the Pyramid Lake Paiute Tribe the absolute right to con-

trol the lands in the Pyramid Lake Reservation.

The Tribe contends that the language quoted earlier

from Hynes is merely dicta. However, this holding that

there first must be specific recognition of Indian rights to

control absolutely tribal lands before the provisions of

§ 16 of the Indian Reorganization Act are made applicable,

is in conformity with prior case law and is entirely rea-

sonable when dealing with executive order reservations.

In Sioux Tribe v. United States, supra, the court held that

A-92

the interest received in Indian reservations created by

executive orders “was subject to termination at will of

either the executive or Congress. In Hynes, supra,

the court stated that such rights “may be terminated by

the unilateral action of the United States. If the

Tribe’s contention is accepted and the Indians are given

the power to prevent any sale or disposition of tribal

lands by withholding their consent, then the power of

the executive or Congress to unilaterally deal with such

lands created by executive order is effectively checked. It

is seriously doubted that Congress intended to divest itself

and the executive of such power without such intention

being expressly stated.“

There is still another reason why the Indian Reorgani-

zation Act is inapplicable to this case. As stated, the Act

became law on June 18, 1934. By this time the executive

or administrative decision not to assert a fishery right had

already been made. The temporary restraining order was

entered on February 13, 1926. Although aware of the grow-

ing problems with the fishery, no one applied for an

A-93

way, during which the assertion of a fishery right was

not made by the officials in charge. The decision not to

assert a fishery right was made and followed before the

Indian Reorganization Act became law. To hold that 416

of the Indian Reorganization Act should apply retroac-

tively would cast a cloud upon the titles to millions of

acres of lands.

In accordance with Rule 52(a), Fed. R. Civ. Proc., the

findings and conclusions contained in this decision shall

constitute additional findings of fact and conclusions of

law in this proceeding.

An appropriate judgment will be entered forthwith.

Dated this 8th day of December, 1977.

/s/ J. BLAINE ANDERSON

United States Cireuit Judge

Sitting by Designation

A-94

Appendix F

In the United States District Court

For the District of Nevada

Civil No. R-1987-JBA

United States of America,

Plaintiff,

and

Pyramid Lake Paiute Tribe of Indians,

Plaintiff-Intervenor,

vs.

Truckee-Carson Irrigation District, et al.,

Defendants.

[Filed Dec. 12, 1977]

FINDINGS OF FACT

AND

CONCLUSIONS OF LAW

BRIEF SUMMARY OF PROCEDURAL BACKGROUND

AND BASIC ISSUES

Following refusal by the United States Supreme Court

to entertain original jurisdiction (See United States v.

Nevada and California, 412 U.S. 534 (1973)), the United

States as plaintiff instituted this action on its own behalf

and on behalf of the Pyramid Lake Paiute Tribe of Indians

(Tribe) on December 21, 1973. Among other things, the

complaint sought to quiet title in the plaintiff in its fidu-

ciary capacity of a Winters reserved water right (207 U.S.

A-95

564 (1908)) for the use and benefit of the Tribe, with a

priority date of December 8, 1859, which would be super-

imposed over all other prior rights in the Truckee River,

in order to fulfill the alleged purposes for which the reser-

vation was created, including the maintenance and preser-

vation of Pycamid Lake and the lower reaches of the

Truckee River fcr fishery purposes.

As of October 8, 1974, the Tribe was permitted to inter-

vene as a plaintiff in its own right, asserting the same

fishery claim.

Many of the 17,000 plus defendants answered, setting up,

among others, the defenses of res judicata and collateral

estoppel based upon the prior adjudication in United States

of America v. Orr Water Ditch Company, et al., Equity

No. A-3, in the United States District Court for the Dis-

trict of Nevada (Orr Ditch). Further, defendants assert

that federal law does not recognize a Winters reserved

water right for the executive order reservation for fishery

purposes, but that if it does, that right has been irrevo-

cably lost by application of res judicata and collateral

estoppel principles.

Stated very succinctly, the plaintiff and Tribe seek to

avoid the application of those preclusive principles on

equitable and other grounds and for the further reason that

during the prosecution of the Orr Ditch case there existed

an impermissible conflict of interest among the government

lawyers with respect to water rights being asserted for the

plaintiff and those being asserted for the benefit of the

Tribe, particularly a water right for fishery purposes, which

conflict of interest denied the Tribe due process of law.

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By order dated February 5, 1975, the affirmative defenses

of res judicata and collateral estoppel were bifurcated for

separate trial before the court and a discovery schedule

was fixed.

The trial on the bifurcated issues commenced on Novem-

ber 17, 1975, and continued intermittently until conclusion

of the evidentiary portion on May 20, 1976.

Following preparation of the reporter’s transcript, spe-

cial master exhibit indexes and post-trial briefing, final

arguments were heard on October 27 and 28, 1977, and the

matter was then submitted for decision on the bifurcated

issues.

Accordingly, and based upon the evidence adduced, and

the reasonable inferences to be drawn therefrom, the court

does hereby make and enter findings of fact and conclu-

sions of law as follows:

FINDINGS OF FACT

1. By order of the Commissioner of the General Land

Office made on December 8, 1859, the lands comprising the

Pyramid Lake Indian Reservation were withdrawn from

the public domain for the use and benefit of the Indians

(Tribe). This withdrawal was confirmed by President U. S.

Grant by executive order of March 23, 1874, stating that

the same ‘‘be withdrawn from sale or other disposition and

set apart for the use of Pah-Ute and other Indians resid-

ing thereon.” That said reservation is an executive order

reservation as distinguished from a treaty reservation and

no treaty exists between the Tribe and the plaintiff. There

is no evidence that the Tribe holds any of the lands or

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claimed water rights involved in this action by virtue of

any patent or other conveyance from the United States.

Title to the reservation lands and whatever appurtenances

may exist with respect thereto ic vested in the United

States. The Tribe and its members, the present occupants

of the reservation, are the lineal descendants of the Indian

peoples who historically occupied the general area.

2. That said reservation situated in Western Nevada

contains approximately 475,000 acres of land surrounding

Pyramid Lake and extending up the Truckee River to a

point several miles north of Wadsworth, Nevada. That

Pyramid Lake is the terminas of the Truckee River and

its tributaries and there is no outlet from the lake. It is

approximately 20 miles long and 5 miles wide with an

approximate maximum depth of 335 feet and is the rem-

nant of prehistoric Lake Lahontan, which it is believed

once covered much of Western Nevada. Its present surface

elevation is approximately 3790 ft. The elevation has re-

duced since 1859. It has fluctuated considerably in the

intervening years depending on many factors, but the

elevation of the lake, based on recent records, gives the

appearance of relative stabilization.

3. That the primary purpose for the creation of this

Paiute reservation was in furtherance of the then existing

national governmental policy of setting apart the various

Indian tribes of the West on reservations on the public

domain, conforming as nearly as possible to their historic

areas of occupancy. That with respect to this Tribe there

were several apparent subsidiary purposes for the creation

of the reservation reflected in historic documents. It is not

reasonably possible to rank these subsidiary purposes in

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the order of greatest importance as among them. However,

they are found to be (1) to remove the tribal members

from the emigrant trails to avoid conflict with the white

settlers and travelers; (2) to provide agricultural and

grazing lands in order to further the policy of teaching

the Indians the pursuits of agriculture a». animal hus-

bandry, and thereby diverting them from tei <= »madic

habits and customs and their dependence upon b ating: und

fishing as their sole sources of sustenance, and (3) to pro-

vide the Indians with access to Pyramid Lake and at least

the lower reaches of the Truckee River in order that they

might obtain their sustenance, at least in part, from these

historic fisheries.

4. That the Tribe was recognized by executive order

as a separate and distinct tribe of Indians as early as 1859.

Pursuant to the Act of June 18, 1934 (48 Stat. 984), as

amended June 15, 1935 (49 Stat. 378), the Tribe adopted

a constitution and bylaws and on November 21 1936, was

issued a corporate charter, and its corporate existence is

still recognized and lawful; however, such recognition did

not include the right to control absolutely tribal lands or

interests appurtenant thereto.

5. That Lahontan cutthroat trout and cui-ui fish were

native and indigenous to Pyramid Lake. That by 1940 the

Lahontan cutthroat had become extinct, but that it was

known for several decades prior thereto by many con-

cerned persons that extinction was probable. A related

species of cutthroat trout has been succesrully introduced

into the lake by the Indians in cooperation with interested

state and federal agencies. The cui-ui, though felt to be

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endangered, still exist in the lake and recent efforts toward

restoration appear to justify optimism for eventual success.

6. That on June 17, 1902, the Irrigation and Reclama-

tion Act of 1902 became law. On July 2, 1902, the Secretary

of the Interior withdrew from public entry the lands re-

quired for the plaintiffs’ first reclamation project, now

known as the Newlands Project in the vicinity of Fallon,

Nevada, and thereafter undertook and completed construc-

tion of the Derby Dam on the Truckee River, the Truckee

Canal for diversion purposes, the Lahontan Dam and

Reservoir on the Carson River, and the construction of

approximately 250 miles of lateral and sub-lateral irriga-

tion ditches sufficient to irrigate approximately 151,000

acres of dry and arid lands.

7. In order to further effect the national policy ex-

pressed in the Reclamation Acts, on March 13, 1913, the

plaintiff commenced a quiet title action in the United States

District Court for the District of Nevada, entitled United

States of America v. Orr Ditch Water Company, et al

(Orr Ditch), In Equity No. A-3. This action was specifically

instituted by the plaintiff in order to quiet title in and to

the waters of the Truckee River for the use and benefit

of the plaintiff for the Newlands Reclamation Project and

in its representative capacity for the use and benefit of the

Pyramid Lake Paiute Tribe of Indians. On July 25, 1914,

plaintiff filed an amended complaint adding new parties

and to refer to the Truckee River “and its tributaries,”

and not just the Truckee River. Paragraph 16 of both the

original and the amended complaint stated that the govern-

mental purposes in instituting the action were, among

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other things, to protect the “Indians and their descendants

in their homes, fields, pastures, fishing, and their use of

said land and waters.”

8. That Orr Ditch was intended by all concerned, law-

yers, litigants and judges, as a general all inclusive water

adjudication suit which sought to adjudicate all rights

and claims in and to the waters of the Truckee River and

its tributaries, both natural and flood waters, to the end

that its decree would determine the relative rights of the

parties thereto so that “it may be known how much of said

waters may be diverted from said river by the parties

hereto and for what purposes, where, by what means of

diversion, and with what priorities.”, and required all

parties to fully set up their respective water right claims.

9. That it was the intention of the plaintiff, by and

through its attorneys, the Bureau of Indian Affairs, and

the Bureau of Reclamation, to assert as large a water

right as possible for the Indian reservation, and to do

everything possible to protect the fish for the benefit of

the Indians and the white population insofar as it was

“consistent with the larger interests involved in the propo-

sitions having to do with the reclamation of thousands of

acre

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