Brief for Respondent — United States v. Grand River Dam Authority

Supreme Court brief1960

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Text

Lake ee ee

“WAY 13 1960

NING, |

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INDEX.

; Page

Question Presented. ........... Ferny a enyeny Araneae 1

Statement ......... Ste ah ca fats ce vc al bie ig alata a ine te 2

Summary of Argument ...... eae ney aan er oo

Argument:

II.

In the Flood Pontroi Act of 1941, Congress _

Manifested No Intention to Depart From Its

. The Right to the Use ~ of the Waters in the Grand

River Were. Vested in Respondent by the State

of Oklahoma and Those Waters Were Appro-

priated at the Time of the Taking Herein ......

A.-The Grant to Reapondent .:.......ceccecss

B. The Interest of the State of Oklalioma ....

‘

C. The Appropriated Waters of the Grand

Re EY aan » win aie OS wk ee

The Vested Water and Franchise Rights in the

Grand River Were the Private Property of Re-

spondent at the Time of the Taking Herein and

Just Compensation Must Be Paid ....:.......

A. The Water Rights ........: SS) ea eae Pee

B. The Franchise Rights *................

Long Established Policy to Recognize and Re-

spect Rights to the Use of Water Vested Under

Pp ARRIBA MaRS ee Satomi nes Ae

There Is No Support in the Cases for Petition-

er’s Claim That Its Dominant. Servitude Ex-

tends to: Non-Navigable Rivers, ‘and Adoption :

of That ‘Standard by This Court Can Cause

Havoe With Vested Property Rights .........

RRR i ARN cd SRL Ge lwnie on AAEM EEE guna Ata og lng Ey Cb

‘1

. 14

" 24

. Petitioner Must Pay Just Compensation for the’

Property Rights It Has Taken from Respondent

il i Index Continued

' TABLE OF CASES

Cases: | | ; Page

Ashwander vy. ‘Fennessee Valley Authority, 20% U.S. 9

| err Ti i NP a ete Cr et rR ET Se. 29

Baumann v. Snirha, 145 F. Supp. 617 (D. Kan., sore

eGismad, Sie UR568 2 oo sa 17-

City of ‘Pulsa vy. Grand- Hydro, District Court of

Mayes County, Okla. R. Pi Sie 0 Gh ta B25

. 16, 18, 34

Eastern Band ‘of the Cherokee Indians. v. “United

Pasibon: B27 Biss Bae 6a oko ce ca bok eer ewes Py >

Federal Power Commission ° ‘Niagara Mohawk

Power Gorm, 347 UB. 290 oo as ecies ee 18

Frost v. Corporation Commission, 278 U.S. 515... .8, 20

Grand River Dam Authority v. Grand-Hydro, “B35

iS Seer eae eh a atta eae 3,6, 7, 8, 11, 20,

es 21,:23, 33

Grand River Dam Authority v. Grand-Hydro, 192

Cele Wea Bae P26 TRO os Sik eee cies eae ee 15

Grand River Dam Authority v. Grand-Hvydro, 200

Okla: 157, 301 -P: 2d. 225 5005 ise i leche mahal ic 6,11

Grand River Dam Authority v. Federal Power Com-.

mission, 246 F. 2d 453 (10th Cir., 1957) ......... 5

Hardin ve Jordan, 140 U. S. 371 ee Ro She Sy, >

Ickes v. Fox, 300 US. 8 1S 7 OPE pam OE EERSTE hy ‘8,18

Intefnational Paper Co. v. United States, 939 U.S.

Bs space ens bates oe ec dy ca eeek 8, 18, 19, 20

2 lowa- Wisconsin Bridge Co. v. United States, 84 F.

Supp. 852 (Ct. CL, 1949), cert. denied, 339 U S. oe 28.

Jackson v. United States, 103 F. Supp. 1019 (Ct. ¢

Ss ees epee ae ies wk nko 5 a a A ie 20

Monongahela Navigation Co. oe States, 148

Si Raa ak Daan oe be pk oka RE a A ee 20

Murphy v. Kerr, 296 Fed. 536 (D. N. M., edt

affirmed, 5 F. 2d 908 (Sth ‘Cir., 1925) .2.... ,8, 15,18

Oklahoma v. Atkinson, 313 U.S. 508 ...5.......... 33

Rank v. Krug, 90 F, Supp. 773 (S.D. Cal., 1950) . 1s

Southern Counties Gas Co. v. United States, 157, F.

Supp. 934 (Ct CL, 1958), cert. denied, 358 US. 815 20

United States v. Ay ynalachian ‘Electric Power Co. :

ae A Se. SRA Rea Ee Fea Si RAR ee a a er aa hoe 29

United States. v. Chandler- Dunbar. Water Power

oe» Be Ue Sea Sener eM IDE fet 29

rey

a f

Index Continued iil

pe pe es ote ‘ Page

United States! Ve. Gerlach Live Stoek Co., 339 U.S. -

PE ee GE ee OEEG ss hie oe sO ARO 8, 16,18

United States. Ne Kamsas C ity Life Ins. Co., er U.S.

SF ERNE MEARE EEE SOR sk ee aww bes , 30, 31, 34

United Statas Vv: ‘Kelty (reported with United States

eM MOS Ne sts UE ose 5 by y 0 vipiv' n> §, 9, 18, 28, 29

United States v. ‘Powers, 94-F/2d. 783 (9th. Cir.,

195), ehirmed: 300 U.S. 827 cio sive Likes es i

United States v. Rio Grande levifation Co., 174 US.

| EERE SS Siete ab ist FE eae 2 ten a a Pere ee oe

United States vi Smoot Sand & Gravel Corporation,

ee CP EI TOE Die vc sce cae nee anes 8

“United States v. Twin City Power Co., 350 U.S. 222 32

United States v. Willow River Power "Co. 324 U.S.

We ge ee are ee gt toon Kae oe IF a PRE

United States v. 5,677.94 Acres of Land, 162 F. Supp.

+ ‘108‘(D. Mont., 1958) ...... Oe es OK PE ORS imIE AE $2.28, 32

ONSTITUTION AND STATUTES: ' ; <°

Act of March. 3, 1893, 27 Stat. 612...2......%..: cee eee

Act of April'26, 1906, 34 Stat, 137 .....a@....0....7, 14

Act of August 26, 1954, 63 Stat: 822 <.....0....... By

Compiled Laws of Okla. of 1909 .............. Beate |

Enabling Act of June 16, 1906, 34 Stat. 267 J27 2... «15°

Federal Power Act of June 10, 1920, 41 Stat. 1077,

fi GR ey 4 eg. See eee ete Pein TES 8, 24, 27

Ilood Control “Act of, August. 18, 1941, 55 Stat. 638

\*. 4 8, 24, 26, 27; 29

Flood ¢ ‘oritrol Act of December 22, 1944, 58 Stat. SS7 24

60 Okla. Stat. Annot. (1949), § 60 ...... igo ue 16

Oklahoma Code Annot., Pile 82 3.5 Tare Growers Waa 15

Organié Act of May 2 » 1890, OG RiGt RY ......ck re 14

Reclamation Aet of June 1%, 1902, 32 Stat. 390, 43. -

See ae eh a ec ae NS ge 8, 24

Session, Laws of Oklahoma, 1935, Chap. 70, Art. 4

b 23, 6, 10

Constitution of ~ United States: a *

Ras By Sy eon ne ees) WERE See Bandas Panes he tas

Fifth Ame eed a tealaee tie ata ad ele cai passim

Constitutionof Oklahoma ;: Sp

RRO EE oe ies ea bana eats Bae Papa 1d

iv Index Continued

MISCELLANEOUS; Page

Miscl. Vol, 478 General ~~ Office, Dept. of the

NN a iat cikws oy. bes c eae ees ben bk ee.0tbes 6, 12

Proclamation of Statehood No. 6869, November 16,

EIS on EY ees ere ee TS 40°

House Doe. No. 107, 76th Cong., ist Seas, .......: ; 25, 26

~ House Dac. No. 308, 74th Cong., Ist Sess. ...... pee

HLR. 5976, 59th Co ng--tst Sess Carers oe tate, AE AAS Pe 14

H. Rep. No. 2347, Vol. 1, 59th Cong., Ist Sess. .... 14

40) ri 08 Ree, 3: * RAS WF PAL ota 14

Mills, lands of the Five Civilized Tribes (1919) .. 12, 13

“Vv

wer

IN THE

Supreme Court of the United States

OCTOBER TerM, 1959 . ‘

‘

No. 503

; V

Unrrep States or America, Petitioner

V. |

Granp River Dam AytHority, Respondent

On. Writ of Certiorari to the United States

Court of Claims

BRIEF FOR RESPONDENT

QUESTION PRESENTED

Respondent, Grand River Dam Authority, respect-

fully submits that the questions presented in petition-

er’s brief do not correctly state the issue in this case.

The real question presented is:

Whether respondent's vested water -and franchise

rights, acquired under state law, in a non-navigable

stream ean be taken or destroyed by the United States

without the payment of just compensation.

STATEMENT

In view of amissions in petittoner’s statement, we

believe it appropriate to make the following supple-

mental statement.

The Corps of Engineers of the United States Army

completed feasibility studies of the Grand River in

1932. A report of these studies was published as House

Document 308, 74th Congress, First Session. The

study ant report conclnded that federal development

of the lower reaches of the Grand River was not eco-

nomically justified at that time. (Fdg. 3, R. 114).

Following these studies and report, the State of

Oklahoma, by legislative enactment, created the Grand

River Dam Authority, a pul ¢ corporation, for de-

velopment of hydro-electric power on the Grand River.

(Session Laws of Oklahoma, 1935, Chap. 70, Art. 4, p.

- 350 et seq.) ‘This Act ‘“tappropriated to and vested in”

‘the Authority all of the water power rights in the

Girand River, together with the exclusive right and

franchise to develop and use the waters for the produe-

' The report specifically stated :

**| Tlhere ls no present or prospective income to be had from

reservoired waters for publie or private use other than that to

be obtained from construction of power and water supply

reservoirs, which should be developed by private capitals."’

House Doe. No, 308, 74th Coug., Ist Sess., at p. 1260.

In addition, this Document recommended ‘that there be no par-

ticipation by the United States in the control of floods in the Grand

(Neosho) River watershed"’ 7d. at p. 1261.

}

tion of water power ang electric energy and other:

beneficial purposes. City of Tulsa v. Grand-H ydro,

Distriet Court of Mayes County, OkL, Pl. Ex. 1, R. 91

at R. 1012 aeeord, Grand River Dam Authority v.

Grand-Hydro, 335 U.S. 359, 362-64; Fdgs: 4-5, R.

114-16.

Respondent, Grand River Darn Authority, prepared

a comprehensive plan for the storage and control of

the waters of the Grand River, and its tributaries

within the State of Oklahoma, in order to make’ bene-

fieial use of such waters for the development and gen-

eration of electric power and-energy. By 1939, respond-

ent had developed a plan which contemplated the

construction, maintenance and operation by respondent

of three dam-and-reservoir projects on the Grand

River, with hydro-clectric generating units at the

several projects. All were to constitute a single system

functioning under unified control. The first of these

projects was to be constructed at Pensacola, the second -

down-stream from Pensacola at Markham Ferry, and

the third down-stream from Markham Ferry at Fort

Gibson. Under the plan, the Pensacola project was

to provide the principal headwater and: power storage,

and the installations at Markham Ferry and Fort

* The deeree in City of Tulsa v. Grand-Hydro, which is set out

in full in the record (R. 91-105), found and adjudged as follows:

*“* * ® no person, firm or corporation other than the Grand

River Dam Authority has acquired since statehood the right

to appropriate any of the waters of Grand River to a bene-

ficial use; that Art. 4 of Chapter 70 of the 1935 Session Laws

of the State of Oklahoma, which became effective on the 29th

day of July, 1935, appropriated to and vested in the Grand

River Dam Authority, the absolute right to control, store and

preserve the waters of Grand River for the purposes set forth

in said Act * * *.’’) (Emphasis added) (R. 101).

“Gibson were to be ‘‘run of the river’’ plants. The plan

contemplated that the water stored at Pensacola would

be used three times for the generation of electric power

and-energy: first, through the Pensacola unit; second,

through the Markham Ferry unit; and then through

- the Fort Gibson unit. (Fdg. 6, R. 116-17).

The United States ‘did not express any affirmative

interest in.the development of the Grand River until

the Flood Control Act of August 18, 1941, 55 Stat. 638.

Prior to the enactment of the Flood Control Act

of 1941, the Authority completed the construction of

the Pensacola unit and completed plans for the Mark-

ham Ferry and Fort Gibson units; and also acquired

_ lands, easenients, rights-of-way and constructed.trans-

mission lines, substations and facilities of such capacity —

and voltage to interconnect and make workable the -

three units (Fdgs. 8(d), (e), R. 120-21) .*

Also prior to enactment of the Flood Control Act

of 1941, the Authority. issued revenue ponds in the

amount of $10,000,000 to finance the construction of

the Markham Ferry and Fort Gibson projects (Fdg.

8(b), R. 118), pledging as security for the payment of

these bonds the revenues derived from its properties,

including wested water rights grid franchise rights m

the Graad River.

The Authority, of course, never procured a license

. for the Fort Gibson project. It did, however, procure

a license for the Markham Ferry project. (Fdg. 21(g),

*The size of the transmission lines constructed prior to the tak-

‘ing by the United States of the Fort Gibson Dam site were of such _

size (110 Ky.) as to adequately transmit the power to be created

at the two downstream damsites. (Exhibit A to Petition at R. 6A;

see also, R. 77-78).

~~”

a J |

R. 129). The licenses issued by the Federal Power

fommission to the Authority for the Pensgcola and ,

Markham Ferry projects retained:in the United States ~

no control whatsoever in or over the power pools of

these projects. The storage and discharge in the -

reservoirs above the power pools are unde the diree-

tion of the Corps of Engi.weers, all of which was agreed

to by the Authority before the Heenses were issued.

(Fag. 8(c), R. 119-20; Fdg. 21(¢), R. 129; Fdg. 22,

R. 129-31).

The court below held that caine was entitled

to just compensation for both its water power rights

at the Fort Gibson project and its exclusive franchise.

to develop electric power and energy at the Fort Gibson

project. It has received no payment of any kind for

these properties.‘

Petitioner attacks the judgment of the Court of

Claims on two grounds: (1) the Court of Claims

erred in holding that respondent has a property inter-

* The condemnation case covering the seventy aivctveat: referred

to by petitioner (Br. for the United States, p. 10), is still pending

in the United States District Court for the Northern District of

Oklahoma, and there is no overiap between the claim in that case

and the claims in this case. The relocation of certain transmission

lines and the acquisition of certain flowage rights (ibid.) were

settled by agreement between the Authority, and the Government

and are not included in this suit.

The claim which the Authority made melee the Federal Power

Commission, alluded to by petitioner (Br, for the United States,

pp. 10-11), likewise has no effect on any of the claims in this vase.

There, ‘the Authority requested the Commission to assess the

United States and charge it for the benefits accruing to the Fort

Gibson project from the sterage and headwater improvements at

the Pensacola project. The Federal Power Commission declined

‘to entertain the petition on the ground that it was without juris-

diction, and the Court of Appeals. for the Tenth Cireuit affirmed.

Fdg. 20, R. 126-27; Grand River Dam Authority v. Federal Power

Commission, 246 F. 2d 453 (10th Cir., 1957).

est in the waters of the Grand River; and (2) the

Court of Claims erred in holding that the Govern- |

ment’s dominant navigation servitude did not apply to ~

the waters of the Grand River, a non-navigable stream. *

SUMMARY OF ARGUMENT

At the time of the taking by petitioner, respondent,

by legislative grant from the State of Oklahoma, was

vested with the absolute right to use and control all of

the water power rights in the Grand River, a non-

navigable stream, together with the exclusive franchise

to develop the same. Session Laws of Oklahofna, 1935,

Chap. 70 Art. 4, p. 350 et seq.; City of Tulsa v..Grand-

_ -Hydro, District Court of Mayes County, Okl., Pl. Ex. 1,

R. 91 at R. 101; Grand River Dam Authority v. Grand-

Hydro, 335 U.S. 359, 363, affirming, Grand River Dam

Authority v. Grand-H ydro, 200 Okla. 157, 201 P. 2d 225

The State of Oklahoma had the power and authority

to appropriate to and vest in respondent all of the

water power rights in the-Grand River, together. with

the exclusive franchise and right to develop the same.

The deed from -the United States to the Cherokee

Nation, dated December 31, 1838 and recorded in Misc:

Vol. 478, pp. 733-41 of the General Land Office, De-

partment of the Interior, Washington, D. C., divested

the United States of all its right, title and interest, if

any, in and to the waters of the Grand River. There-

after, the United States never had any claim either to

the lands embraced by the deed or, to any of the waters

in the non- -navigable streams tlowing through those

-lands. -

In any event, to the extent that any right, title or

interest to the water power rights in the non-navigable

‘ --?

streams in those lands may have remained in the United;

States following the deed to the Cherokee Nation in

1838, the control of these rights was expressly turned

over to the new State of Oklahoma by the United States

by virtue of § 25 of the Act of April 26, 1906, 34 Stat.

137, 146.

The Constitution of Oklahonia, which was approved

by the United States (Proclamation of Statehood No.

6869, November 16; 1907), placed the ** Arid Siftes Doe-

trine’’ of water law in effect in Oklahoma, through

which flowed the Grand River. The people of the State

of Oklahoma, acting through their legislature, had the

right and power to appropriate to and vest in respond-

ent the water power rights and franchise rights which

were taken and destroyed ,by petitioner. Murphy v.

Kerr, 296 ®ed. 536 (DAN.M., 1923), affirmed, 5 F. 2d

908 (Sth Cir, 1925); Pede ‘ral Power Commission vy,

Niagara Mohawk Power Corp., 347 U.S. 239, 252. This

it did in the Act creating respondent. City of Tulsa v.

. Grand-Hydro, supra at R. 101; Grand Riv er Dam

Authority v. (rand-H ydro, supra at 363. 5

The water rights which were taken here are “hot

rights to unappropriated waters, as suggested by peti-

tioner. (Br. for the United States, p. 35). All rights

to the waters of the Grand River had been “‘appropri-

ated to and vested in the Grand River Dam Authority”

and others by the State of Oklahoma (City of Tulsa

v. Grand-Hydro, supra at R. 101), and there were no

unappropriated waters in the Grand River at the time -

respondent built its dam at Fort Gibson.

The vested water rights of respondent in the Grand

River are private property (Federal Power Commis-

ston ¥. Niagara Mohawk Power Corp., supra at 246-47 ;

cA \ bh

Murphy v. Kerr, supra; Ickes v. Fox, 300 U.S. 82, 95-

96), and these property rights cannot be taken without

payment of just compensation. International Poper

Co. v. United States, 282 U.S, 399, 407; United States

v, Kelly (reported with United States v. Cress), 243

U.S. 316.

———

Respondent’s license and franchise oi a property

right, the taking of which also requires payment of

just compensation. International Paper Co. v. United

States, supra at 407; Frost v. C

278 U.S. 515; Jackson v. United States, 103 F. Supp.

ration Commission,é@

1019 (Ct. Cl., 1952) ; United: States v. Smoot Sand d&: *

Gravel Corporation, 248 F, 2d 822, 828 (D.C. Cir.,

1957). -Indeed, this Court has required this very re-

spondent, 6n an earlier occasion, to.pay just eompensa-

tion for the valne of an exclusive right to develop-a

power site on the Grand River. Grand River Dam

Authority v. Grand- Hydro, jane

It : ¥

Congress has manifested a.clear policy, in, the Reela-

mation Act, the Federal Power Act, and the Flood Con-

trol Act, to recognize and respect rights to the use of

water vested or accrued under state law. See, e.g.,:

United States v. Gerlaci: Live Stock Co., 339 U.S. 725.

me Ss“ Diaringy te consideration of the Flood Control Act of

‘

(which authorized federal construction of the

a Gibson Dam) Congress recognized that- respond-

‘, ent had exclusive franchise and water power rights in

the Waters of the Grand River.

~The absence of any provision in the Flood Contrél

Act of 1941 expressly indicating that rights vested

under state Jaw would not be recognized reflects an

intention on the part of Congress that resporident be

r. rf , \

+ 9 ;

compensated for its rights which were taken or de-

stroyed by the construction of the Fort Gibson Daim.

W =

In any event, the Constitution of the United States

requires that just compensation be paid when property

rights in the waters of a non-navigable stream a ken

or destroyed. U.S. Const., amend. V; United States

v. Kelly, supra; United States v. Kansas City Life Ins.

C'o., 339 U.S. 799. This is to be distinguished from the

situation in-which property rights in the waters of a

navigable stream are taken or destroyed. No compen-

sation is required in the case of the navigable stream,. |

since all who hold rights in navigable waters hold them |

subjéct to the dominant servitude of the United States.

United States v. Kansas City Life Ins. Co., supra.

_Those who hold rights in and to the waters of a non-

navigable stream are not subject to such a servitude,

’ and where their property rights are taken, just com-

pensation must be paid.

. ¥.

Petitioner cites no cases to support its suggestion

that the United States may, without payment of just

compensation, take property rights in the ‘waters of

a non-navigable stream because those waters ‘‘ directly

and substantially’’ affect navigation and commerce in

a navigable river. To those who hold vested rights in

the waters of non-navigable streams, there has been

‘no ‘‘ample notice over the years’’ that their property

‘tis subject to a dominant public interest.’’ Cf., United

States v. Kansas City Life Ins. Co., supra at 808.

Adoption of the standard urged herein by petitioner

would cause untold havoe in innumerable instances —

holders of. such vested isin rights.

It cannot be denied that the { nited States has the

_ power to take property rights in the, exercise of its

powers over commerce and navigation. U. S. Const.

ee 1, § 8, cl. 3. But when the United States takes

ights over which it does not have a dominant servitude, ° -

it is Subject to the requirements of the Fifth Amend-

ment, which imposes upon it an obligation: to pay just

compensation.

ARGUMENT a

Awe. .

The Right to the Use of the Waters in the Grand River Were.

Vested. in Respondent by the State of Okiahoma and Those

Waters Were Appropriated at the Time of the Taking

Herein €

A. The Grant To Respondent: Respondent Was cre-

ated by the Oklahoma Legislature for the development

of hydro-electric power onthe Grand River. Session

Laws of Oklahoma, 1935, Chap. 70, Art. 4, p. 350 et seq.

(Fdg. 4, R. iy. Among the powers, rights and

privileges conferred upon respondent by the legislation

creating it were the following:

‘*(a) To control, store and preserve, within the’

boundaries of the District, the water of Grand

River and its tributaries for any useful purpose,

and to use, distribyte and sell the same within the

boundariés of the District; ; Tiree ~

(b) To develop and generate water power and

electric energy within the boundaries of the Dis-

trict * * * ’’ (Fdg. 5, R. 115).

r oe ’

The courts of the State of Oklahoma have considered

this statute and have determined that:

‘“IN]o TSON, firm, or corporation other than the

Grand River Dam Authority has acquired since

statehood the right to appropriate any of the waters

of Grand River'to a beneficial use; that Art. 4 of

fat

: a

: “Chap. 70 of the 1935 Session Laws of the State of

Oklahoma, which became effective on the 29th day

of July, 1935, approyjriated to and vested in the

- Grand River Dam Authority the absolute right to

. ¢ontrol, store and preserve the waters of Grand

River for the purposes set forth in said Act * * * ”’,

City of Tulsa v. Grand-Hydro, supra at R. 101.

_ This vesting and appropriation in respondent was

expressly recognized by the Supreme Court of the State

of Oklahoma in Grand River Dam Authority v. Grand-

-~'Hydro, 200 Okla. 157, 201 P; 2d 225; and by this Court

—& “an Grand River: Dam Authority x. Grand-Hydro, 335

: Ws. 359, 363. ;

¢ B. The Interest Of The State Of OklaRoma. Peti-

tioner does not challenge the fact that’the State of

Oklahoma granted to respondent th&use and control

of the waters in the @rand River. * Petitioner instead

appears to contend that the State of Qklahoma‘did not

. have an interest in the wat@rs of the Grand River,

‘and accordingly could nof give any interest in these

waters to respondent. (Br. for the’ United States,

pp. 37-39). * ‘ * ,

So certain is petitioner that respondent cannot show

State ownersfip of the waters used by the Fort Gibson

dam, that it has flung down the gauntlet. ‘The critical

element’’, petitioner contends, ‘‘is the federal char-

acter of the property within the State before it became

a state. ° It is on the basis of that postulate that the

respondent must somehow show a grant from the Fed-

eral Government”’ (Bi\ for the United States, p. 41).

Respondent accepts this challenge.

. All of the Grand River lies within that part of

« Oklahoma which, prior to statehood, was known as

the Cherokee Nation, which in turn was a part of Indian

Bat \.

| ‘Territory. These landsewere originally a part of the

ir * Any implied reservation of the water rights was to the Indian¢

«Louisiana Purchase. By a series ofstreaties® between

the United States and the Cherokee Nation of Indians,

agreement was reached for the removal of a majority

of the Cherokees from their native lands to the Terri-

tory that was later to beeome known as the Indian

Territory. Mills, Lands of the Five Civilized Tribes -

(1919). at 25-36. For consideration, including the re-

linquishment ef their right and claims to their native

lands, the United States issued a Patent and Deed -’

to the Cherokee Nation, granting and conveys

the specific terms \of this Patent and Deed, is}u

December 31, 1838, the Cherokee Nation was ‘‘to nthe

and to hold the same ‘together with all the rights,

privileges, and appettenances thereto belonging to the

Cherokee Nation forever.’’ (Recorded in Miscl. Vol.

478, pp. 733-41, Records of the General Land Office,

Dept. of Interior). Seé, Mills, op. cit. supra at 26-28.

The United States did not reserve any right, title

or interest in or to the non-navigable waters within the

‘area of land conveyed to the Cherokees.* In spite

of later agreements between the Cherokee Nation and,

the@Jnited States, which diminished the acreage origi-

-nally conveyed, the title to the lands, which included.

the Grand River, were never changed.

5 These treaties have been disenssed in Eastern Band of the

Cherokee Indians v. United States, 117 U.S. 288.

not to the United States. See, United States-v. Powers, 94 F. 2d

783, 785 (9th Cir., 1938), affirmed, 305 US. 527; United States v.

5,677.94 Acres of Land, 162 F.“Supp. 108, 116 n. 8 (D. Mont.,

1958).

‘The Cherokee Nation, acting under the supervision.

of the United States Government, actively entered into

and managed its affairs as a’ governmental entity until

- just. prior to the time Oklahoma was admitted to state-

hood. By § 15 of the Act of March 3, 1893. 27 Stat.

612, the Cherokee Nation was authorized to allot the

remaining lands which it held under the original Pat- '

ent and Deed to its members in severalty; and subse-/

quently, these lands, in fact, were so conveyed. See,

Mills, op. cit. supra at 29. At no time did the lands

-—which included the, Grand: River ever revert to the

rn.

ownership or control of the United States; and at no

time after the Patent and Deed of Decerhber 31, 1838° “

were any of the lands touching upon the Grand River

in the publie domain, nor were they public lands or

federal non-‘‘publie”’ lands. (See,-Br. for the United

States, p. 41).

Here, then, is the ‘critical element”’, whieh petitioner

has demanded as the “postulate”? upon -which the

State’s claim to ownership must be founded. Here is

the direct chain of title, the ‘“‘grant from the Federal

Government’\ which petitioner has conceded is what

is necessary to Dyar the burden of proving State own-

ership of. the wafers (See, Br. for the United States,

p. 39). . :

‘” The indisputabhs facts of history thus demonstrate

that up to the time. lahoma’s admission to state-

ho6d, the United States had divested itself entirely of.

aay right, title or interest in and.to the waters of S

the Grand River. To the extent that. any right, title

or interest to the waters in the non-navigable streams

embraced by the lands of the Cherokee Nation may. have

remained in the United States, the control of these

Waters for power purposes was expressly turned over

to the State of Oklahoma by the United States by

»>

ay ¢? .@

(

‘virtue of § 25 of the Act of April 26, 1y46, 34 Stat. 157,

‘**An Act to provide for the final disposition of the

affairs of the five civilized tribes in the Indian Terri-

tory and for other purposes.’’ Section 25 of that Act,

which is set out in full as an Appendix to petitioner’s

brief, gave to power-and light companies rights-of-way

to build dams acress non-navigable streams ‘for, the

purpose of generating power.

The.legislative history of this Act is illuminating.

When it was originally introduced as H.R. 5976, 59th

»Cong., Ist Sess., it did not contain §25. When the

Bill reached the Senate, § 25 was placed into the Act.

After some debate on the Senate floor (See 40 Cong.

Ree. 3205), the all important proviso at the end of § 25

was offered as an amendment by Senator Clapp and

was unanimously adopted. Jbid. That proviso read:

‘* Provided, That all rights granted hereunder shall

be subject to the control of the future Territory

or State within which the Indian Territory may be

situat *”’ :

The House approved the conference report (H. Rep.

* No. 2347, Vol. 1, 59th Cong., Ist Sess.) which recom-

. mended acceptance of § 25, as. amended. It is plain

from the legislative history of this Act that it was the

intent of Congress that the future State of Oklahoma

was to control the waters of non-navigable streams

used in the production of power from dams. placed

across such streams. |

C. The A ppropriated Waters of the Grand River.

Prior to admiss.on to statehood, the Oklahonia Terri- ..

tory (as distinguished from the Indian Territory) was -

governed by a Territorial Legislature. See Organic

Act-of May 2, 1890, 26 Stat. 81 (contained in Okla.

* Nw

statutes were carried for,

Stat. Annot. (1952)). In one of the sessions of that

Legislature (1905), there was adopted a series of Kes

compiled in the statutes of the Oklahoma Territory ywn-

der a chapter entitled *‘ Irrigation’’. See historical ndte

following § 3929 in the Compiled Laws of Oklahoma

of 1909. This was the genesis 06 the.“‘ Arid States Doe-

trine”’ as it applies to Oklahoma. Most of these early

when Oklahoma was ad-

| “day in the Oklahoma

Codg Annotated,s rm a part of the

“Water Code” ff the State. This Water Code pro-

vides {gr the appropriation of water in non-navigable

streams and establishes the machinery whereby such

appropriation for beneficial use may be accomplished

and adjudicated.

- Under the Water € sehe, the State a asserted its

right to coutrol the manner in which the water of. the _

State’s non-navigable streams may be utilized. See,

Grand River Dam Authority v. Grand-Hydro, 192

Okla. 693, 139. P. 2d 798.°. The procedure it establishes

is the law of Oklahoma; and it applies to all who seek

/ 8 | |

*The Oklahoma Territory and the Indian Territory were ad-

mitted into the Union /as the State of Oklahoma pursuant to the

Enabling Act of June 16, 1906, 34 Stat. 267: the Constitution of

, . the State was adopted by popular vote; the Proclamation of State-

~ hood was issued (No. 6869, contained in Okla. Stat. Annot. (1952)

Const.,°p: 405); and Oklahoma became a state on equal footing

with the original states on November 16, 1907. Séction 2 of the

Schedule to the Oklahoma Constitution (Okla. Stat. Annot. (1952).

Const., p. 583) provided that the laws in force in the Oklahoma

Territory were to be carried forward and be ing full foree and

effect at the moment of statehod.

*In Murphy v. Kerr, 296 Fed, 536 (D.N.M., 1923), affirmed,

5 F.2d 908 (Sth Cir., 1925), the, Court said:

“Water running in a natural stream belongs to the public.

By statutory enactment the states of Arizona, Colorado, Cali-

fornia, Montana, Nevada, New Mexico, Oklahoma, Oregon,

North Dakota, South Dakota, ark. ‘aes Wyothing, and

the beneficial -use of the. waters of non-navigable

streams.” :

The legislation which created respondent, in practical

effect, made an exception to the appropriation pro-

cedure provided by the Water Code. Instead of re-

quiring respondent to follow the procedure outlined in

the Water Code, the Oklahoma Legislature directly

vested in respondent the right to the use of the waters

of the Grand River. The courts of Oklahoma have so

held. City of Tulsa v. Grand-Hydro, supra at R. 101.

The technique which the State of Oklahoma employed

‘to vest in respondent the right to control, store and

'- tioner, Were not rights to unappropriated waters, as

preserve the waters of the Grand niver is withqut sig-

nificance for purposes of this case. What is significant

is that by the statute creating respordent, all of the

rights to the use of the water in the Gand River were

vested in respondent.

Thus, the water rights which were taken by peti-

* Idafio have declared in substance that all waters within the

state are the property of the public, or belong to the state.

The modern ciation is that such waters are owned by the

state in trust for the people." (Emphasis added). 296 Fed.

at 540.

* Petitioner has set out, in a footnote at p. 30 of its brief, the.

full text of 60 Okla. Stat. Annot. (1949), Sec. 60, for the purpose,

apparently, of indicating that the appropriation doctrine in Okla-

homa is nét entirely pure. Whether or not this is so seems entirely

irrelevant. ‘See, United States v. Gerlach Live Stock Co., 339

U.S, 725.

It is also irreleyant that the State of Oklahoma may have

changed from the riparian Woetrine to the appropriation doctrine

at or abont- the time of its Admission to Statehood (See, Br. for

the United States, pp. 41-42). Certainly.,a change from the

riparian to the appropriation doctrine coulnot have operated -to

divest the federal government of its riparian rights (See, Br. for

17 ;

_s :

petitioner suggests (Br. for the United States, p. 35).

At the time petitioner built its dam at Fort Gibson,

all rights tothe waters of.the Grand River had been

appropriated and were actually being put to beneficial

use. In consequence, and-contrary to the contentions

of petitioner, the only issue in this case is as to waters

which have been appropriated, —.: .

62 Ne ee

eam“

It is respectfully submitted that the State of Okla-

homa had the power and the authority to, and in fact

did, appropriate to-and vest in respondent all of the

water rights in the Grand River, t3gether with the

exclusive franchise and right to develop the same; and

that, at the time of the taking by petitioner herein, -

the waters of the Grand River at the Fort Gibson site

were approprigited waters under the absolute control

of respondent.

OS II

The Vested Water and Franchise Rights in the Grand River

* Were the Private Property of Respondent at the Time of

the Taking Herein and Just Compensation Must Be Paid

A. The Water Rights. The holdings of fis Court,

as well as the uniform holdings of other cotwts, make

it plain that rights to the use of running water are

determined by state law. See, -e.g., Federal Power

Commission v. Niagara Mohawk Power Corp., 347 U.S.

239, where this Court said: ‘‘[W]ater /rights, like

other real property rights, are determined by state

law. Title to them is acquired in conformity with that

the United States, p. 41) since, as the history set out at pp. 12-13,

supra, indicates, the federal government had no riparian rights to

be divested of. Furthermore, there would be nothing to preclude

Oklahoma from changing from one doctrine to the other. See

Baumann ¥. Smrha, 145 F. Supp. 617, 624 (D. Kan., 1956) (and

cases cited), affirmed, 352 U.S. 863.

law.’’? 347 U.S. at 252; accord, United States v. Gerlach

Live Stock Co., 339 U.S. 725, 742; Ickes v. Fox, 300 U.S.

- 82, 95; Hardin v. Jordan, 140 U.S. 371; Murphy v.

Kerr, 296 Fed. 536, 540 (D. N.M., 1923), affirmed, 5

F. 2d 908 (8th Cir., 1925); Rank v. Krug, 90 F. Supp.

773, 786 (S.D. Cal, 1950) and cases cited at 785. .

This Court has recognized on innumerable occasions

that where-state law grants a property right in and

to the use of waters of a running stream, such a prop-

erty right must be recognized in determining just,

compensation for the taking thereof. International

Paper Co. v. United States, 282 U.S. 399, 407: United

States v. Kelly, 2483 U.S. 316; Federal Power Commis-

ston V. Niagara Mohawk Power Corp., supra. And

this principle does not depend upon whether the right .

to use the waters of a runningsstream is acquired by

virtue of the riparian doctrine (Federal Power Com-

mission V. Niagara Mohawk Power Corp., supra) or

under the -doctrine of appropriation ¢ Heke ‘Vv. For,

supra) or, indeed, by a mixture of the two. United

States v. Gerlach Live Stock Co., supra. It is the

- right to the use of the waters which is recognized, and

the legal basis upon which the right may have been

- acquired is quite irrelevant. ae

It is clear from the discussion in Part I, pp. 10-14,

supra, that respondent was vested, by the State of

Oklahoma, with the right to the use and control of

the waters in the Grand River; and that the State of.

Oklahoma had the power and authority to vest. these

water rights in respondent: And there is an un-

equivoéal declaration by the Oklahoma courts that the

waters In question were in fact appropriated to and

vested in the Grand River Dam Antbority. Cit

Tulsa Vv. Grel-Hydro, supra at R. 101. In

19.

quence, there can be no doubt that respondent had

vested water rights in the Grind River at the time

the United States built the Fort Gibson Dam, and

that the construction of that Dam took or destroyed the

private property of respondent, thus entitling it to

, just compensation. |

| 2

This issue has long been settled and certainly seems

foreclosed by this*Court’s decision in International

Paper Co, v. United States, supra. In that case, it

‘will besrecalled, the International Paper’ Company

‘had been authorized, pursuar. to the law of the State

of New York, to draw a po.tion of the flow of the

Niagara River from a still larger diversion authorized

to the Niagara Falls Powe: Company. During World

War I, the Seeretary of War directed the Power

Company to take all of the flow and utilize energy

therefrom for certain named companies whose work

was deemed more useful fr national defense pur-

poses than that of the Paper Company. The con-

sequence was that the Paper Company lost its rights

to that portion of the flow of the River which it had

-had theretafore. Tis Court, in holding that the

Paper Company was entitled to just compensation,

expressly noted:

“The petitioner’s Yight was to the use of the

water; and when all the water that it teed was

withdrawn .* *.* and turned elsewhere — by

vovernment., requisition “for: the production” of

power it is hard to see what more the Govern-

ment could do to _ the use.’? 282 U.S. at 407.

No valid distinction ‘can be made. between what

occurred in the International Paper Co, ease and what

has occurred here. ‘There is no room for quibbling

distinctions’’. 282-U.S. at 407. Respondent's ‘‘right

was to the use of the water’’ at the Fort Gibson site ;

and when all of this water which respondent was

- entitled to use was taken from it by the Government,

‘it is hard to see what more the Government could

do to take the use.’’ /bid. As in International

Paper Co.,. respondent here was deprived of a

valuable property right for which it is entitled te

just compensation.

B. The Franchise Rights. There is no dispute that

respondent hel@ a franchise from the. State of

Oklahoma to develop and generate poy power and

energy at the Fort Gibson site. Theté is also no”

dispute under the decisions of this Court, and the

decisions of other’ courts, that such a franchise or

license is a property right for the taking of which

compensation must be paid. Monongahela Navigation

Co. v. United States, 148 U.S. 312"; Frost v. Cor-

poration Commiission, 278 U.S. 515; International:

Paper Co. v. United States, 282 U.S. 399; see also, -

Jackson v. United States, 103 F. Supp. 1019 (Ct-CL,

1952); ef., Southern Counties Gas Co. vy. United |

States, 157 F. Supp. 934 (Ct. CL, 1958), cert. denied,

358 U.S. 815. cet

This specific issyp has already deen deternrined for

all practical purposes by this Court. In Grand River —

Darn Authority v. Grand-Hydro, 335 U.S. 359, this

Court had before it a dispute between the ‘present

The language of the court in the Monongahela case is partic-—

ularly approppiate to the instant case :

‘Ang here it may be noticed that, after taking this prop-

erty, te government will have the right to exact the same

- tolls the navigation company has been receiving. It would

seem strange that if, by asserting its right to taka.the prop- .

erty, the government could strip it largely of ios Salve: de-

streying all that value whic’, omes from the receipt of tolls,

- 21

respondent and.Grand-Hydro, a private corporation

which had been given a state license to appropriate

the waters of the Grand River for the development

of hydro-electric power. After the license had been

- granted to Grand-Hydro, “the Oklahoma Legislature

created the Grand River Dam Authority, respondent

herein, and granted-te it the exe ‘Lusive authority to

develop the Grand River. .This Court observed that

“In effect, the petitioner [the Authority] ‘thus

acquired. a state priority over the respondent

. |Grand-Hydro}, although the respondént held title

to certain water rights and to the land needed for the

project.” 385 U.S. at 363. The specifie issue before

this Court in the Grand-H ydro litigation was whether,

‘in determining the value of certain land which the

Authority had taken over from Grand-Hydré, it was :

appropriate to consider the value of that land fer

power sife purposes This Court affirmed the ‘decision

of the Supreme Court of Oklahoma which had held

that it was necessary to consider the value of the land

asa power site. ,

This Court has ees settled the issue of whether a

permit or franchise to generate electric power and

energy from the waters of ‘the Grand. River js a

property right; and certainly, this property right ix _

no different when it belongs to the Grand River Dam

Authority than when it belonged to Grand-Hydro.

and having taken the property at this reduced valuation, im-—

mediately possess and enjoy all t'.e profits from the collection

of the same tolls. In éther words, by the contention this ele-

ment of value exists before and. after the taking, and disap-

pears only during the very moment and process of taking

Surely, reasoning which leads to such a result must have

"Some vice, at } toaat the vice of injustice. ** 148 U.S. at 337-38."

“£

. . 2)

‘g oo

‘

}

Petitioner argues that the claim for the’ value of

the franchise right does not give rise to: a right of

compensation since it ‘is no more than a claigy that

a prospective business opportunity was lost/’ (Br.

for the United States, p. 34), and only ‘ta hope or

' expectancy’? was destroyed (Br. for the] United

States, p. 28). But this. argument disregitrd

established facts of record. While concededly 6

ent-had ‘not hegun physival construction of. the Fort

Gibson project before petitioner bhit the project, it’

t- had taken many of the steps preliminary thereto. It

hid developed a comprehensive plan hu whic the

Fort Gibson project played an important. role. It hac

constructed and placed in operation the Pensacola unit

‘which was the largest and the keyunit #6 the operation

of the nits downstream. It had acquired land, ease-

‘ments, and rights-of-way, and lad constructed trans-

‘odenlan lines, substations and facilitiés to intereom-

municate the Fort Gibson project with the Pensacola

' project and the Markham ony project. (Pp. 3-4,

supra),

By the time of the taking” herein, respondent had

~ already been making beneficial use of the water rights

_in the Grand River, had developed and had in opera-

tion a going concern, had pledged the revenues from

the water rights and franchise rights “in the (irand

River for the payment of revenue bonds, and had

speyt millions of dollars in_ providing facilities to

make beneficial use of the water and frane hise rights. é

It ix hardly appropriate to characterize the

Authority’s loss as being one of **prospectivé business

opportunity”, or the destruction of ‘ta hope or ex-°

peetaney’’. Respondent's foss was exactly what the

Court of Claims held it to be—that of ‘property

, ww

| ¥ 9 ares

rights which: could not be taken without just com-

pensation”. (i. 109).

fi any event, a similar argument’ was made and

rejected in the Grand-Hydro case, supra. There it -

was contended that sinees Grand-Hydro had not *

procured a license from the Federal Power Commis-

sion, the rights grantetl to it by the State had not «

betome: sufficiently ‘real to justify payment “for its.

claimed franchise right: .335 U.S. at 372. This argu- ;

ment was rejected by the Supreme Court of Okkihoma —

and by this Court. Jbid. The Grand-ydro case

thus stands with other decided cases, supra, as holding

that the franchise right to bo the waters of a

flowing stream in order ‘to preéduce electric power is

a property right entitled to the protection of the Fifth

Amendment.”

'! Petitioner refers to certain sections Othe Act establishing the |

Grand River Dam Authority and suggests that this Act contem-—

plated that the developnent of 4he dams on the Grand: River would

be a cooperative effort of the Authority and the United States

(Br. for the United States, p. 34a. 17). From this it concludes:

that the federal construction of: the Fort Gibson project did not

frustrate either the state or federal objectives.

Petitioner, however, misconstrues the language of § 862(e) (set.

out in’Br. for the United States at p. 4). The so-called ** coopera-

tive language’’ gvas solely for the purpose of insuring that the op-

eration of the dams for flood control purposes woul e under

the supervision of the Corps of Engineers. _ This in faet was~pro-

vided for in the licenses issued by the Federal Power Commission

for the operation-of the Pensacola and Markham Ferry projects

(Fag. 8(e), R. 119; Fdg 22, R. 129-31).

In the Flood Control Act of 1941, Congress Manifested No

Intention to Depart From Its Long Established Policy to

8 => a ee

. Under ‘State.Lew

: t + Nothing: contained in the Flood Control Act of

1941, which provided for the construction/of the Fort

Gibson Dam, ‘indicates, an intention by Congress to

depart from its well established policy to recognize

and respect rights. to the use-of water vested‘ or

aceryed under state law. | mite :

In §8 of the Reclamation Act of June 17, 1902, 43°

U.5.C. 383, 32 Stat. 390, Congress expressly Provided :

“Nothing ‘in this chapter shall be construed as

‘affecting or intended to affect,or to in any wav

sinterfére with the laws of. any State or Territory

relating to the control, appropriation, use,eor

distribution of water * * * or any vested right

‘acqnired ii@under phe Fre f

Similarfy, in ‘Béetion 97 of the Federal Power on %

of June 10, 1920, 16. U.S.C. 81, 41 Stat. 107 i, Aon-- e

gress expressly provided ait 5

: +» ‘Nathing’ contained in this chapte’ rm shall be af

~ eonstfued as affecting or intending to affect or / ri

in any way to interfere wifh the laws of the

respective States relating {6 the control? ay ae

priation, use or distribution*ef water wT

, any vested right acquired therein’

rede the Flood Control Act of December 22,

1944, $3 U.S.C. 701-1, 58 Stat. 887, Congress oxpereny he

- provided: | |

“* * * I[T]t is declared to be the policy of the

Congress to recognize the interests and rights of

the States * * * to preserve and protect to the,

iia oe: :

fullest possible extent established and * potential

uses, for all purposes, of the waters of the

Nation’s rivers * * *.” ae

--These Acts—all dealing -with problems relating to

reclamation, ° the generation of power, and. flood

control—manifest a deep rooted concern on the part

of Congress with respect to rights vested under the

if laws: of any state. A reversal of this policy should

not be lightly imputed. :

Although, Congress did ‘not expressly set forth a

declaration similar to those “quoted above when it

enacted the Flood Control Act of 1941, it did indicate

that the Fort Gibson Dam was té be constructed it

accordance with House Document 107 of the te

‘Congress, First Session. That Document clearly in-

dicated a recognition by Congress that the State of

Oklahoma had established7 respondent and had

cranted to it rights -with respect to the development

and sale of power from. the Grand River. Sd for

“gr the Chief of Engineers, stated:

re. ¢ , a . ,

\, CO * * * Local interests desire construction of

Na “\ yeservoirs on fthe lower Grand ( Neosho) Rivér

sata ke ae the—Pens cola, ‘Markham Ferry and Fort

ail “+ » Gibson sites’ for the productiow of hydroelectric

ares ae Se power ant for flood control. The desired im-.

Sy arate articularly with respect to the

“YE ee” development éf water power, are proposed by the

State of* Oklahoma which, through legislative

enactment, has created a Conservation and

ieee Reclamation District known as the Grand River

s Dam Authority, this .authority estabiished pri-

ti hg . o e et.

. ¥ marily for the development and sale of power

*> .°» House Doe. No. 107, 76th Cong., at p. 103.

~ 96

The same Document further stated:

‘* * * Tt is noted that development of the

Pensacola site for power development and flood

control is planned by the Grand River Dam

' Ayithority, a Conservation and Reclamation Dis-

trict, created by the State of Oklahoma primarily

for the development and sale ofpower from the

Grand River. The work is dding financed by a

loan and grant obtained frédm the Federal

Emergency Administration of Public Works.”’

_ House Doe. No. 107, 76@h Cong., at p. 104.

And the’ District Engineer reported :

‘*In 1935 the State of Oklahoma created the

Grand -River Dam _ Authority. Legally this

Authority has the right to issue bonds for the

construction of power development on Grand

River, but the Ae prohibited the Authority from

distributing power to the consumer. The 1937

Oklahoma Legislature removed this restriction.

The Authority has been‘actively interested in this

_ project and obtained, through the¢ National

» Resources ‘Committee, a report on the Npcial and

economical aspects of the Pensacola \project,

together with a preliminary analysis of thApower

market applicable to this project. Said report:

was ~published as- Flood Control Committee’

Document No. 4, 74th Congress, Ist Session. Its

veheral tenor was favorable. A loan and grant

has been made by the Publie Works Administra-

tion to the Grand River Dam Authority for the

development of the Pensacola project.’’ House

Doe. No. 107, 76th Cong., at p. 9.

Accordingly, it seems clear that when. Congress

authorized the construction of the Fort Gibson dam

in the Flood Control Act of 1941, it did so with the

knowledge that this respeudent held the franchise

and water power rights to develop the water power

“?

inappropriate to attribute to Congress a

Shr

TT . @

of the Grand River and that respondent had actually

completed one of the units (Pensacola).

Moreover, Congress has also recognized and com-

pensated the City of Muskogee, Oklahoma, tor water

rights in the Grand. River which were destroyed or

damaged as a result of the construction of the Fort

Gibson Dam. Act of August 26, 1954, Public Law 663,

gsr: Congress, 63 Stat. 822." ;

. ae Ri eee |

Under the expressed policy of Congress as set Gut

in the Reclamation Act, the Federal Power Act and

the Flood Control Aet—and there being nothing to the

contrary in the Flood Control Act of 1941-—-it is not

wutention that

its vested

respondent would be compensated for apy g

rights which were destroyed or damage.

of the construction of the Fort Gibson Dam.

Petitioner Must Pay Just Compensation for the Property

_ Rights It Has Taken From Respondent ee

The question presented in: this «ase is whether

respondent’s vested water and franchise rights,

acquired under state law, In a non-navigable stream

ean be taken or destroyed by the United States with-

out the payment of just compensation.

—————

12 Publie Law 663, Chap. X, p. 22, states:

‘For contention to the City of MusRogee foward the con-

struction of a water supply pipeline from existing city water

supply intake on eho River near. its junetion with the

Arkansas River to Fort Gibson dayiin settlement of @l dam-

ages to the water/supply of the City & Muskogee, on account

of the construction and operation of ort Alibsor Reservoir,

$200,000.00 out of fund) previonsly appropriated.”’ (Em-

phasis added). »

“

As a result-

Preliminarily, it should be noted that respondent

concedes that the United States has the power, under

the Commerce Clause of the Constitution, to take or

Mlestroy water. rights in non-navigable streams, in-

cluding those which respondent has in the Grand

River. But the issue in this case is not one of power,

but rather of compensation. And respondent stren-

uously contends—and the Court of Claims has held—

that when the U nited States exercises its power to

take property, rights in non-navigable streams, it can

do so only upon payment of just compensation.

The holding of the Court of Claims on this question

is neither novel nor new; on the contrary, it is entirely

consistent with established decisions. United States

v. Kelly (reported with L ited States v. Cress), 2%

U.S. 316; Jowa-Wisconsin Bridge Co. v. United

States, 84 F. Supp. 852, 857, 867. (Ct. Cl, 1949), cert.

denied, 339 U.S. 982; see, United™States v. 5,677.94

Acres of Land, 162 F. Supp. 108, 112 (D. Mont., 1958).

-In the Kelly case, this Court held that where the

United States, by the erection of a dam ona navigable

river, affected the flow of water in a ndén- -navigable

tributary so as to make it impossible to operate

the respondent’s mill, it was required to pay just

compensation, This case is even stronger than Kelly.

In Kelly, the Government's activities were confined

to navigable waters but affected respondent’s property

in the non-navigable tributary. Here, by contrast,

the Goverfiment’s activities were themselves in the

non-navigable river and directly destroyed respond-

ent’s rights. If the payment of just compensation

iz)

. 2)

was necessary in the Kelly case, it is 4 fortiori

required here.” | |

The distinction between what the Government may

take without compensation and what it may take only

upon payment of just compensation, has been, we

submit, plainly delineated in thi Court’s decisions.

The governing principal is that water, rights in

navigable streams are inferior to, and subject to, the

superior navigation easement of the federal govern-

ment; and thus, such water rights may be taken or

destroyed by the Government without compensation,

United States v. Chandler-Dunbar Water Power

Company, 229 U.S. 53; Ashwander V. Tennessee

Valley Authority, 297 U.S. 288; United States Vv.

Appulachian Electric Power o,, 311 US. 377.

The touchstone in all of these cases is the para-

mount servitude of the federal government. This

13 Petitioner’s efforts to attenuate the holding in the Kelly case

(Br. for the United States, pp, 26-28) are ingenuous but unavail-

ing. Despite its suggestion that the decision has all but been

overruled (Br. for the United States, p. 27), this Court has ex-

pressly declined to do so. United States v. Willow River Power

Co., 324 US. 499, 506-07. '

That Kelly involved an award of only $1,500 (Br. for the United ,

States, p. 26), does not make it any the less binding since constitu-

tional principles plainly do not vary with the amount of money

involved. °

And that Kelly was a riparian owner does not make, his posi-

tion stronger than respondent's here. Respondent's right to t

use of the waters of the Grand River were vested under the law

of Oklahoma and are entitled to the same constitutional protection

as Kelly’s rights which were derived under the law of Kentucky.

The suggestion that Kelly's mill had been in operation when its

utility was destroyed by the United States and that respondent

here had only ‘‘a hope or expectaney"’ (Br. for the United States,

pp. 27-28) is a distinction which does not comport with the facts

- of record in this case (pp. 21-22, supra).

oO .

servitude is-limited to the bed and banks of navigable

streams, and igh roperties within the bed and banks

of navigable” streams may therefore be taken or

destroyed without compet&ation. But the superior

right of the Ujifted States has never been held to

extend beyond the bed and banks of the navigable

streams, ahd when property outside the bed and banks

of navigable streams is taken, just compensation must

be paid.

‘This proposition has been very clearly expressed by

Justice Burton, speaking for the Court, in United

States v. Kansas City Life Ins. Co., 339 USS. 799:

‘It is not the broad constitutional power to

regulate commerce, but rather the servitude.

derived from that power and narrower in scope,

_ that frees-the Gevernment from. liability in these

seryitude, it ig exercising its paramount power

in the interes of navigation, rather than taking

the private property of anyone. The owner's use

.of property riparian to a navigable stream long

has been limited by the right of the publie4o use

the. stream in the interest of navigation. See

Gould on Waters, ¢. IV, §§ 86-90 (1883): I Farn-

ham, Waters and Water Rights, «. ELL §29

* (1904). This has applied to the stream and to

the land submerged by the stream. There thus

has been ample notice over the years that such

property is subject to a dominant public interest.

This right of the public has crystallized in terms

of a servitide over the bed of the stream. The

relevance of the high-water level of the navigable

stream is that it marks its bed. Accordingly, it

is consistent with the history and reason of the

rule to deny compensation where the claimant's

private title is burdenc with this servitude but

lo award compensation where his title is not so

burdened.’ (Emphasis added). 339 U.S, .at 808,

Since the ‘Grand River is concededly a noen-

navigable stream, wider the criterion set forth in the

Kansas City Life Ins. Co. ease, its bed and banks were

not burdened with a dominant servitude renin te

the United States. In consequence, at the time

respondent was vested with all of the water power

and franehise rights in the Grand River at the Fort

Gibson site, its property interests were not burdened

by any federal servitude. It follows then that when

the . United fare constructed the Fort Gibson.

project, it corfld not avail itself of the servitude which

it could have only on a navigable river. Though it’

had the power to take respondent’s water cmc]

franchise rights, it could take them only subject. to

the limitations imposed by the Fifth Amendment.

Contrary te petitioner’s contention (Br. for the

United States, p. 18), it has no ‘* federal prerogatives”

by virtue of its ‘commerce power”. The commerce

power gives it only a #paramount servitude over the

bed and banks of a navigable river;/it gives no

servitude over the bed and banks of a non-navigable

river. And absent the servitude, the taking by peti-

tioner is a taking subject to the Fifth Amendment and

only upon payment of just compensation.

Vv ‘s

There Is No Support in the Cased for Petitioner's Claim That

Its Dominant Servitude Extends to Npn-Navigable Rivers

and Adoption of, That Standard by This Court Can Cause

Havoc With Vested Property Rights aE.

Petitioner apparently recognizes that it cannot

prevail in this case under established law. Perhaps

this recognition accounts for petitioner's assertion that

the question is ‘not whether the Grand Biver is navi-

gable but whether it directly and substantially affects

navigation and commerce in the Arkansas River

jasin.”’ (Br, for the United States, p. 13; see also,

p. 20). Such audacity is rare even for the Govern-

ment—it is an effort to extend its dominant servitude,

_ hitherto limited to: the bed and banks of a navigable

river, into non-navigable tributaries of those rivers.

Petitioner does not—and indeed cannot—cite any

eases to support this. extraordinary assertion. The

decision in United States v. Twin City Power Co.,

350 U.S, 222, is,-as petitioner concedes (Br. for the

United States, p. 19), a decision which deals with a

navigable, river (the Savannah River). Petitioner

also concedes that the Court of Claims found this

distinction significant. Jbid. It is to be noted that

the Court of Claims is not alone in this regard. See,

United States v. 5,677.94 Acres of Land, 162 F. Supp:

108 (D. Mont., 1958), where the Court said: ‘‘It is

my opinion that the rule of Twin City Power. Co,

case would in any event be limited in its application

_.to a navigable stream.’’ 162 F. Supp. at 116.

The decision in United States vy. Rio Grande Trrigqa-

tion Co., 174 U.S. 690, is completely irrelevant. to

petitioner’s assertion.. In that case, the Attcrney

General of the United States, acting pursuant to a

federal statute (which made it a criminal offense to

create an obstruction ‘to the navigable capacity of any

waters, in respect to which the United States has juris-

diection,”’ and which authorized proceedings in equity

to enjoin such obstructions), sought to enjoin a private

¢company from constructing a dam aeross the Rio

Grande River in the territory of New Mexico on the

ground that such appropriation by the defendant would

substantially interfere with the navigable capacity of

the river in the downstream areas. This.Court merely

sustained the right of the federal government to

proceed in that fashion, No claim for compensation

was involved.

Oklahoma vy. Atkinson, 313 U.S. 508, is the other

side of the coin. In that case, the state of Oklahoma

sought to enjoin the construction of the Denison Dam

on the Red River. The sole question determined by

this Court in that case was that the Dam could be

constructed pursuant to the power of the federal

government to regulate commerce and navigation. Sig-

nificantly, the opinion by Mr. Justice Douglas, fer an

unanimous Court, specifically pointed out:

¢ “There is no complaint that any property owner

will not receive just compensation for the land

taken.”? 313 U.S. at 554.

The reliance placed by petitioner on Grand River

Dam Authority v. Grand-Hydro, 385 U.S. 359, is

equally unavailing. It is signifieant that petitioner

a 7 ‘ °° ‘

does not rely upon thiS Court’s opinion in that case,

‘but rather upon what petitioner there unsuecessfully

’ asserted in its brief (Br. for the United States, pp. 22-

5) and what the minority of the Court wrote in dissent

(Id. at 25-26). We have. discussed the Grand-Hydro

case in detail (pp. 20-23, supra), and it is readily ap-

parent that the @rand-Hydro casy did not and indeed

could not have determined the right of the United

States to the waters of non-navigable streams, since ne

rights of the, United States were involved in that ease.”

"The observation in the majority. opinion that ‘The United

States enjoys special rights and power in relation to navigable

streams. and also to streams which affect interstate commerece”’

(335 US. at 373), was unnecessary to the decision of the case

and i hardly support for petitioner's contention. ;

** 34

The fact of the matter is that never before Has it

been held that the federal government can take water

rights in ‘a non-naviyable stream without paying

compensation therefor. To embrace \ petitioner's ”

audacious suggestion would. be to wreak, in in-

numerable instances, untold havoe to holders of

vested property rights and to open a Pandora’s box

of, unending trouble, The test petitioner suggests (i.c.,

directly and substantially affecting navigation and

commerce) would encompass almost any non-navigable

stream. And, while it may not be important for this

Court to concern itself with the vested rights which

may exist on ‘‘every rivulet, creek, and stream”’ (c¢f.,

Br. for the United States, pp. 23-24 n. 9), what of

the rights which have vested in the more substantial,

but nevertheless non-navigable, waters throughout

the United States? In Oklahoma alone, the applicea-

tion of this doctrine would mean that the federal

government could take and destroy the water rights

of such cities as Tulsa and Muskogee, and of towns

such as Fort Gibson, Wagoner and Pryor Creek (all

determined in City of Tulsa v. Grand-Hydro, R. 91),

without paying just compensation.

It is difficult to believe that the framers of our

Constitution intended to immunize the federal govern-

ment from the reach of the Fifth Amendment by such

an ‘extraordinary extrapolation of the commerce

power, | ;

It is not amiss to turnagain to this Court's decision

in United States v. Kansas City Life Ins. Co., supra.

There, it will be recalled, this Court. justified the

exercise of the Government's dominant’ servitude

by netting that “[t}here thus has been ample notice

over the years that such property is subject te a

; 306

dominant public interest.” 339 U.S. at 808. But

that was written cera to the Government's

"rights over navigable waters, Not until the instant

has there ever been a claim by the federal

government that tts dominaut servitude extended to

‘the waters of now-navigable streams, There has been

no “ample notice over the yvears’’ to the holders of

_ vested water rights in ‘non-navigable streams that

their’ property ‘is subject to a dominant public

interest.” The standard now urged by petitioner js

a belated, unjustified, uuwarranted and utterly-illegal

effort to clude its constitutional obligation to make just

compensation.

CONCLUSION

For the reasons set forth above, it is respect fully

submitted that the judgment below should be affirmed.

Y. B. BoypstuN

i. O. Drawer 112

Vinita, Oklahoma

Jess LARSON .

1000 Connectient Ave. N. W.

Washington 6, D.C.

Attorneys for Respondent.

Forp, Larson, GREENE & Horaate

1000 Connecticut Ave., N:. W.

Washington 6, D.C. z

WLAN Y. COLE

815 15th Street, N. W.

Washington, 5, D. €.

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