The doctrine of federal reserved water rights generally traces its origins to the seminal decision of Winters v. United States, 207 U.S. 564 (1908). There, the United States Supreme Court ruled, when the United States sets aside an Indian reservation, it impliedly reserves sufficient water to fulfill the purposes of the reservation, with the priority date established as of the date of the reservation.
Over half a century later, following the passage of the McCarran Amendment, the Supreme Court had occasion to revisit – and build upon – this turn of the century decision in Arizona v. California, 373 U.S. 546 (1963). In that case, the Court held that the reserved rights doctrine is not limited to Indian reservations, but also applies to all federally reserved public lands, such as national forests, national recreation areas, and national wildlife refuges. This ruling affirmed the potentially significant scope and extent of federal reserved water rights.
Over the coming years, the Supreme Court had several occasions to explore the contours of the reserved water rights doctrine. For instance, in Cappaert v. United States, 426 U.S. 128 (1976), the Court upheld an injunction against groundwater pumping that would have jeopardized one of the purposes for which the national monument at issue had been established – preservation of the desert pupfish – thereby extending the reach of the reserved rights doctrine to protect federal reserved rights both from injurious surface and groundwater diversions.
Several years later, in United States v. New Mexico, 438 U.S. 696 (1978), the Court denied the Forest Service's instream flow claim for fish, wildlife and recreation uses. Specifically, the Court denied the claim on the grounds that reserved water rights for National Forest lands established under the Forest Service's Organic Act of 1897 are limited to the minimum amount of water necessary to satisfy the primary purposes of the Organic Act – conservation of favorable water flows and the production of timber – and were not available to satisfy the claimed instream flow uses. This decision established that questions concerning the existence and quantity of reserved water rights are largely dependent upon the reservation's authorizing legislation and the specific purposes for which the land was reserved.
With these rulings in place, the majority of the federal reserved water rights litigation has taken place, not before the United States Supreme Court, but in the state courts in the context of their comprehensive and on-going general stream adjudications – many of which have spanned decades or more. Much of this litigation was handled by NRS attorneys in the Denver Field Office, who had relatively close proximity to Colorado's seven water courts.
Unlike many other western states, the Colorado water courts adjudicate water rights in the first instance without any administrative, water rights permitting system, resulting in much water rights litigation. The early reserved rights decisions in Colorado include United States v. Denver, 656 P.2d 1 (Colo. 1982), in which the Colorado Supreme Court affirmed, as a general principle, the reservation of waters unappropriated as of the date of reservation of certain federal lands in Colorado from the public domain and in an amount necessary to achieve the primary purposes of the reservations.
Among the specific claims at issue, the Court denied instream flow claims for national forest lands and a recreational water right for Dinosaur National Monument as unnecessary to fulfill the primary purposes of the reservations at issue. However, the Court recognized potential reserved water rights for water holes and springs on public lands reserved for stock watering purposes under a 1926 executive order known as "Public Water Reserve No. 107" ("PWR No. 107"), as well as a potential reserved water right for Rocky Mountain National Park, subject to further proceedings concerning priority date, quantity, and related issues.
In the wake of this decision, NRS attorneys in the Denver field office handled many significant cases in the Colorado district water courts. For instance, Denver field office attorneys handled an instream flow claim for channel maintenance purposes in the South Platte River. This claim sought to satisfy the ruling in United States v. New Mexico recognizing reserved rights for the primary reservation purpose of securing favorable conditions for water flows under the Forest Service's Organic Act. In 1993, the water court denied the claim – following approximately 100 days of trial spanning the course of a year – in part, on the grounds that the Forest Service possessed land use authority to regulate and limit third party diversions within the National Forests. According to the court, this authority rendered the claimed flows unnecessary to secure favorable water flows. This same court subsequently awarded the National Park Service a reserved water right under the National Park Service's Organic Act for Rocky Mountain National Park, highlighting the critical importance that the authorizing legislation and the purposes of the reservation can have on the success of reserved right claims.
Another success involved the negotiation of a settlement in 2000 recognizing instream flow rights for the Forest Service on every major stream in the Rio Grande River Basin. In 2008, the Colorado water courts recognized a unique groundwater right based on federal law for the Great Sand Dunes National Park, following an uncontested trial, and a federal reserved water right for the Black Canyon of the Gunnison National Park, following decades of litigation and a recent groundbreaking settlement agreement between the United States and the multitude of state, irrigation, environmental, and other interests participating in the case.
The United States' experience in the Colorado water courts in many ways typifies its experience with thousands of other federal reserved right claims prosecuted by NRS water rights attorneys in other adjudications throughout the West. One of the largest of these adjudications is the adjudication of water rights to the Snake River and its tributaries in Idaho (covering 87% of the water in the state). Since the commencement of this adjudication in the late 1980s, the district court and the Idaho Supreme Court have addressed virtually every major reserved right claimed by the United States and its client agencies --- the Forest Service, the National Park Service, the Fish & Wildlife Service, the Bureau of Land Management, and the Bureau of Reclamation.
The United States' successes in this adjudication include the award of reserved water rights for the 133,000 acre Hells Canyon National Recreation Area, six Idaho Wild and Scenic Rivers totaling over 400 miles, and approximately 2,000 stockwatering claims asserted under PWR No. 107, with the United States Supreme Court rejecting the State of Idaho's petition for certiorari on these claims 8 to 1.
The United States also had some initial – and short-lived – success on numerous Wilderness Act claims, with the Idaho Supreme Court issuing a ruling recognizing such claims before reversing itself on rehearing, following an election largely focused on the reserved rights issue in which the Idaho Supreme Court justice who had authored the earlier decision was removed from the bench. This history is emblematic of the often hotly-charged politics that can be associated with such claims.
Another major adjudication is the Klamath River Basin Adjudication in southern Oregon, which was commenced in the mid-1990s. In early 2013, the Oregon Water Resources Department filed its findings of fact and order of determination, concluding the administrative phase of the adjudication and commencing the judicial phase in the Klamath County Circuit Court.
The Oregon Water Resources Department's order sets forth partial orders of determination on the 734 claims filed in the adjudication. The order was largely favorable to the United States approving numerous and substantial federal reserved and state appropriative water rights for several wild and scenic rivers, Crater Lake National Park, wilderness areas, instream flow fire protection for national forest system lands, four national wildlife refuges, Indian reservations, and the Klamath Reclamation Project encompassing 200,000 acres in southern Oregon and northern California. The order also approved most of the United States' claimed "Walton" (Indian successor) water rights for a national wildlife refuge, and resolved a large portion of the United States' contests against Walton claims asserted by competing claimants by denying or significantly limiting the claimed rights.
Exceptions to the Oregon Water Resources Department's order of determination, including the partial orders of determination on each of the 734 claims addressed by the Department's order, were filed in March 2014. Those exceptions will be litigated individually or in groups in de novo proceedings before the circuit court. Completion of this judicial phase of the adjudication will likely take ten to twelve years.
Other on-going adjudications handled by NRS attorneys include general stream adjudications in New Mexico, Utah, Wyoming, Montana, and Nevada. Many successes in these states have resulted from collaborative settlements with the states rather than litigation. For instance, on the eve of trial, the United States negotiated with the State of Utah federal reserved water rights for Zion National Park. This settlement was followed by subsequent agreements with the State recognizing reserved rights for Rainbow Bridge, Hovenweep, Cedar Breaks, and Timpanogos Cave National Monuments; and for the Golden Spike National Historic Site.
Likewise, NRS attorneys have been involved in the negotiation of special "compacts" with the State of Montana. These compacts have recognized federal reserved water rights for numerous federal resources, including instream flows on the Missouri River to promote Wild and Scenic River and Recreational values for two units managed by the Bureau of Land Management; several Fish and Wildlife Service refuges; and National Forest lands. In addition, federal reserved rights have been negotiated for all National Park Service units in Montana, with the parties agreeing to unique provisions to protect the geothermal features from diversions outside the Yellowstone National Park boundaries.
Other federal reserved water right successes include: (1) the settlement of all water rights for all the national parks and monuments in the Little Colorado River Basin in Arizona; (2) the negotiation with the State of Nevada of all water rights asserted for five federal agencies in the Las Vegas Water Rights Adjudication, including the first-ever "national defense/national security" water right for Nellis Air Force Base; (3) the recognition of reserved water rights in the Bighorn River drainage in Wyoming for National Forest lands and Yellowstone National Park; and (4) the recognition of PWR No. 107 claims in the Gila River Adjudication in New Mexico.
The federal government has also had many notable successes in acquiring water rights under state law. For instance, in the Snake River Adjudication, the United States has been partially decreed approximately 10,000 stockwater rights under state law on BLM lands and approximately 9,000 on national forest lands. The United States has also received 900 partial decrees for state water rights for domestic, irrigation and other uses, such as wildlife, commercial, power, and recreation for Forest Service lands and 50 partial decrees for water uses associated with irrigation on BLM lands.
In addition, the United States typically acquires water rights for federal reclamation projects under state law. As discussed in the next section, much litigation has arisen over conflicts between state and federal law concerning federal Reclamation project water.