Appeals from the United States District Court for the District of Oregon. D.C. No. CV-90-01329-HJF. Helen J. Frye, District Judge, Presiding.
Before: Arthur L. Alarcon, William A. Norris, and Edward Leavy, Circuit Judges. Opinion by Judge Norris.
These consolidated appeals arise out of the State of Oregon's attempts to adjudicate the rights of various claimants to the waters of the Klamath River Basin through a complex procedure created by state statute. We are called upon to address whether the State may compel the United States, the Klamath Indian Tribe and other owners of former reservation land to comply with certain terms of the state statute governing the Klamath Basin adjudication.
Facts and Procedural History
In 1975, the Oregon Water Resources Department (OWRD) invoked Oregon's statutory procedure for the mass adjudication of water rights in order to determine all claims to surface water in the Klamath River Basin. The United States claims water rights in this basin on behalf of several federal agencies and as trustee for the Klamath Tribe. The State notified over 25,000 potential claimants, including appellants United States, the Klamath Tribe and members of the Klamath Allottees Water Users Association (Association), a group of individuals who own former reservation land in fee. That same year, the United States filed a suit in federal district court seeking a declaration of the water rights of the United States and the Klamath Tribe in certain tributaries within the Klamath Basin. In 1983, this court heard an appeal from the district court's decision in that case. See United States v. Adair, 723 F.2d 1394 (9th Cir. 1983), cert. denied, 467 U.S. 1252 (1984). We held that the United States and Klamath Tribe possessed reserved water rights to the rivers at issue in the litigation, but left the quantification of those rights to a comprehensive state adjudication of water rights under the provisions of the McCarran Amendment, 43 U.S.C. § 666. Id. at 1406. We further stated, "although the Oregon water rights adjudication system is initially administrative and need not be judicial in nature, we will assume, without deciding, for the purposes of this case that it is not too informal to qualify as a 'suit' within the meaning of McCarran Amendment or a 'comprehensive state adjudication' within the meaning of Colorado River and San Carlos Apache Tribe." Id. at 1405 n.9 (citations omitted).
In 1990, the State reissued notices of its intention to adjudicate water rights in the Klamath Basin. In response, the United States, as owner of federal land in the Klamath Basin and as trustee for the Klamath Tribe, filed the present action in federal district court seeking a declaratory judgment that the United States has not waived its sovereign immunity and that it need not register its water claims or pay any filing fees to preserve its water rights. The Klamath Tribe intervened, joining the claims of the United States to the protection of sovereign immunity and also asserting that subjecting the Tribe to an adjudication by the State of Oregon deprived the Tribe of due process because the State had a history of hostility to the Tribe's treaty rights, including its claims to water in the Klamath Basin. The State countered that the McCarran Amendment waived the United States' sovereign immunity and that the Tribe's claims of bias were baseless.
After hearing cross-motions for summary judgment, the district court held that in enacting the McCarran Amendment, Congress had waived sovereign immunity on behalf of the United States and Klamath Tribe and consented to their participation in the Klamath Basin adjudication. The court held that the United States could be compelled to pay filing fees for the adjudication, but could not be forced to register all of its water claims throughout the state. The court further held that an 1864 Treaty between the United States and the Tribe precluded the State from requiring filing fees from the Tribe,*fn1 but that otherwise subjecting the Tribes to the state procedure did not violate their due process rights.
After the court issued its summary judgment decision, United States v. Oregon Water Resources Dept., 774 F. Supp. 1568 (D. Or. 1991), the Klamath Allottees Water Users Association intervened, claiming to hold the same rights as the Tribe. Members of the Association own property that was once held in trust for the Tribe, but later transferred to individual tribe members in fee pursuant to federal statutes. Without explanation, the district court declined to extend the ruling to the Association's members. These appeals followed, raising the issues we left undecided in Adair. We affirm the summary judgment, with the exception of the district court's ruling that the United States can be required to pay filing fees. We further dismiss the Association's appeal for lack of jurisdiction.
Unless the McCarran Amendment waived the sovereign immunity of the federal government and the Tribe, neither may be required to participate in a state adjudication in order to preserve water rights that have accrued under federal law. See Colorado River Water Conservation District v. United States, 424 U.S. 800, 809-813, 47 L. Ed. 2d 483, 96 S. Ct. 1236 (1976). The McCarran Amendment provides:
§ 666. Suits for adjudication of water rights
(a) Joinder of United States as defendant; costs
Consent is hereby given to join the United States as a defendant in any suit (1) for the adjudication of rights to the use of water of a river system or other source . . . . The United States, when a party to any such suit, shall (1) be deemed to have waived any right to plead that the State laws are inapplicable or that the United States is not amenable thereto by reason of its sovereignty, and (2) shall be subject to the judgments, orders, and decrees of the court having jurisdiction, and may obtain review thereof, in the same manner and to the same extent as a private individual under like circumstances: Provided, That no judgment for costs shall be entered against the United States in any such suit.
Summons or other process in any such suit shall be served upon the Attorney General or his designated representative.
The United States argues that Oregon's mass adjudication scheme is not the sort of "comprehensive suit" contemplated by the statute because much of the proceedings are before an administrative agency rather than a court and because the adjudication is insufficiently comprehensive. In order to decide whether Congress intended to waive the United States' sovereign immunity for water rights proceedings such as those held under Oregon's statute, we must examine both the McCarran Amendment and the Oregon statute, paying particular attention to their historical contexts.
In the nineteenth century, water rights in Oregon were acquired by appropriation or riparian right, or accrued to the United States and Indian Tribes under federal law as federal reserved rights. See 1 Robert E. Beck, Waters and Water Rights § 8.02(c) (1991). Under an appropriation system, as such systems developed in the West, the first party to divert water for a beneficial use has the right to continue to divert that amount of water without interference from subsequent appropriators so long as the water continues to be put to beneficial use. In case of shortages, the entire share of the most recent appropriator is lost before the share of the next latest appropriator is diminished. Under such a system, the date of appropriation and the amount of water appropriated are the critical facts in the determination of the relative rights of water users.
As was traditional in Western states, the relative rights of various claimants to water from a river system were determined piecemeal, as conflicts arose, in traditional lawsuits in equity. See 2 Beck, supra § 15.01; Samuel C. Wiel, Water Rights in the Western States § 624 (3d ed. 1911). As the West became more populated, conflicts over water rights increased. As the interrelation of water rights became more apparent, a dilemma emerged: the nature of traditional civil litigation made joinder of the hundreds or thousands of claimants to a river system extremely cumbersome and inefficient,*fn2 while less comprehensive adjudications were of little value. As the Supreme Court noted in Pacific Live Stock Co. v. Oregon Water Bd., 241 U.S. 440, 449, 60 L. Ed. 1084, 36 S. Ct. 637 (1916), in an adjudication of water rights,
the rights of the several claimants are so closely related that the presence of all is essential to the accomplishment of its purposes, and it hardly needs statement that these cannot be attained by mere private suits in which only a few of the claimants are present, for only their rights as between themselves could be determined.
As it became clear that the necessary scope of comprehensive water rights adjudication could not be accommodated by traditional litigation procedures, Western states began to develop alternate, statutory adjudication systems for the mass determination of the rights of all claimants in a river system. See 2 Beck, supra § 15.01; 2 Wells A. Hutchins, Water Rights in the Nineteen Western States 447-48, 451-70.
In 1909, Oregon created its present statutory system for the mass adjudication of surface water rights. After 1909, water rights could only be acquired through a permit system established by the statute. Or. Rev. Stat. § 537.120. However, all water rights that had vested prior to 1909, but had never been subject to a judicial determination, have been left intact as "undetermined vested rights." Id. at §§ 536.007(11), 539.010. The statute requires that every person or entity claiming an undetermined vested right must file a "registration statement" describing the claim and including the information necessary to determine the claimed vested or reserved right. Id. at § 539.240(1).*fn3 The purpose of the registration is to preserve evidence of pre-1909 claims until those claims are subject to adjudication under the statute. The registration statement must be accompanied by a fee that is calculated according to the type and extent of the water's use. Id. at § 539.081.
Upon petition by a claimant, or on its own initiative, the Oregon Water Resources Department may commence the adjudication of the rights of all claimants to a river or stream. Or. Rev. Stat. § 539.021. Notice must be given to all interested parties. Id. at §§ 539.030, 539.040(2). Those claimants who have already been issued water certificates through the permit system are not required to participate in the adjudication in order to preserve their rights as already determined. Id. at § 539.100. However, those with undetermined claims to the water of the system are required to appear and submit proof of their claims before the OWRD. The OWRD accepts claims and objections to claims, surveys the river system, takes evidence and holds hearings regarding contested claims. Id. at §§ 539.070, 539.100, 539.110, 539.120. After these hearings, the OWRD makes findings of fact and an order determining the parties' water rights. Id. at § 539.130. This order is effective upon issuance unless a party wishes to contest the order and files a bond. Id. at § 539.140(4). After the order is filed, a judicial hearing is scheduled and notice of that hearing is given to the participants. Id. at § 539.140. Parties objecting to the department's order must file written exceptions with the court in order to preserve their objections. Id. at § 539.150. If no objections are filed, the court must enter a judgment affirming the order. Id. at § 539.150(3). Otherwise, a hearing is held at which contesting parties may offer evidence as in a normal civil case. Id. at §§ 539.150(1), 539.150(3). The court ...