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Navajo Nation v. Department of Interior

United States Court of Appeals, Ninth Circuit

December 4, 2017

Navajo Nation, Plaintiff-Appellant,
Department of the Interior; Ryan Zinke[*], Secretary of the Interior; United States Bureau of Reclamation; Bureau of Indian Affairs, Defendants-Appellees, State of Arizona; Central Arizona Water Conservation District; Arizona Power Authority; Salt River Project Agricultural Improvement and Power District; Salt River Valley Water Users' Association; Imperial Irrigation District; Metropolitan Water District of Southern California; Coachella Valley Water District; State of Nevada; Colorado River Commission of Nevada; SOUTHERN NEVADA WATER AUTHORITY; STATE OF COLORADO, Intervenor-Defendants-Appellees.

          Argued and Submitted February 14, 2017 San Francisco, California

         Appeal from the United States District Court for the District of Arizona G. Murray Snow No. 3:03-cv-00507-GMS, District Judge, Presiding

          Scott B. McElroy (argued) and Alice E. Walker, McElroy Meyer Walker & Condon P.C., Boulder, Colorado; M. Kathryn Hoover and Stanley M. Pollack, Navajo Nation Department of Justice, Window Rock, Arizona; for Plaintiff-Appellant.

          Elizabeth Ann Peterson (argued), Edward S. Geldermann, Ellen J. Durkee, and William B. Lazarus, Attorneys; John C. Cruden, Assistant Attorney General; United States Department of Justice, Washington, D.C.; Scott Bergstrom and Robert F. Snow, Office of the Solicitor, United States Department of the Interior, Washington, D.C.; for Defendants-Appellees.

          L. William Staudenmaier III (argued), Phoenix, Arizona, for Intervenor-Defendants-Appellees.

          Michael J. Pearce, Maguire Pearce & Storey PLLC, Phoenix, Arizona; Kelly Brown and Kenneth C. Slowinski, Chief Counsel, Arizona Department of Water Resources, Phoenix, Arizona; for Intervenor-Defendants-Appellees State of Arizona and Arizona Power Authority.

          John B. Weldon, Jr. and Lisa M. McKnight, Salmon Lewis & Weldon PLC, Phoenix, Arizona; for Intervenor-Defendants-Appellees Salt River Project Agricultural Improvement and Power District and Salt River Valley Water Users' Association.

          Stuart Somach and Robert Hoffman, Somach Simmons & Dunn, Sacramento, California; for for Intervenor-Defendant-Appellee Central Arizona Water Conservation District.

          Lauren J. Caster, Special Deputy Counsel, and Gregory L. Adams, Fennermore Craig P.C., Phoenix, Arizona; Jennifer T. Crandell, Special Counsel Attorney General; Adam Paul Laxalt, Attorney General; Office of the Nevada Attorney General; for Intervenor-Defendant-Appellee State of Nevada; Colorado River Commission of Nevada; Southern Nevada Water Authority.

          Adam C. Kear, Chief Deputy General Counsel; Joseph A. Venderhorst, Assistant General Counsel; Marcia Scully, General Counsel; The Metropolitan Water District of Southern California, Los Angeles, California; for for Intervenor-Defendant-Appellee Metropolitan Water District of Southern California.

          Steven B. Abbott, Redwine and Sherrill, Riverside, California, for Intervenor-Defendant-Appellee Coachella Valley Water District.

          Joanna M. Smith Hoff, Assistant Counsel, Imperial Irrigation District, Imperial, California; Charles T. Dumars, Law & Resource Planning Associates P.C., Albuquerque, New Mexico; for Intervenor-Defendant-Appellee Imperial Irrigation District.

          Steven G. Martin and Steven M. Anderson, Best Best & Krieger LLP, Riverside, California, for Intervenor-Defendants-Appellees Coachella Valley Water District and The Metropolitan Water District of Southern California.

          Shanti Rosset, Assistant Attorney General; Karen M. Kwon, First Assistant Attorney General; Cynthia Coffman, Attorney General; Attorney General's Office, Denver, Colorado; for Intervenor-Defendant-Appellee State of Colorado.

          Before: Ronald M. Gould and Marsha S. Berzon, Circuit Judges, and Marvin J. Garbis, [**] District Judge.



         Standing / Sovereign Immunity / Water Rights

         The panel affirmed in part, and reversed in part, the district court's dismissal of the Navajo Nation's Second Amended Complaint, and denial of the Nation's Fed.R.Civ.P. 60(b) motion for relief, in their challenge to the Department of the Interior's published Guidelines in 2001 and 2008 clarifying how it would make "surplus" and "shortage" determinations for delivery to Western states of the waters of the Colorado River.

         The Nation is a federally recognized tribe, and the United States is trustee of the Nation's tribal lands. The Navajo Reservation covers parts of Arizona, New Mexico, and Utah, and lies almost entirely within the drainage basin of the Colorado River.

         The Department of the Interior, through the Bureau of Reclamation, operates dams and reservoirs that control the flow of the Colorado's waters.

         The panel affirmed the district court's dismissal of the Nation's National Environmental Policy Act claims for lack of Article III standing. The panel held that, although the district court considered the Nation's interests in adequate water too narrowly, it agreed with the district court that the Nation failed to show it "reasonably probable" that the new Guidelines threatened either the Nation's unadjudicated water rights or its practical water needs.

         The panel held that the Nation's breach of trust claim was not barred by sovereign immunity, and remanded to the district court to consider the claim on its merits. The panel held that the broad waiver of sovereign immunity found in § 702 of the Administrative Procedure Act ("APA") waived sovereign immunity for all non-monetary claims, and § 704 of the APA's final agency action requirement constrained only actions brought under the APA. The panel concluded that the Nation's breach of trust claim sought relief other than money damages, and the waiver of sovereign immunity in § 702 applied squarely to the claim.

         Because the panel reversed the district court's dismissal of the Nation's breach of trust claim, the panel held that the Nation's appeal from the district court's denial of its Rule 60(b) motion was moot to the extent it sought to amend its complaint to plead additional or alternative waivers of sovereign immunity. The panel held that the Nation was not entitled to relief under Rule 60(b) to amend its pleadings for its National Environmental Policy Act allegations.


          BERZON, Circuit Judge:

         The Department of the Interior ("Interior" or "the Secretary") oversees the control, storage, and delivery to the Western states of the waters of the Colorado River. In most years, each state in the Colorado River Basin receives a fixed amount of water from the river; in "surplus" and "shortage" years, that amount changes. In the face of unprecedented drought and ever-increasing demand for water, Interior published guidelines in 2001 and 2008 to clarify how it would make these "surplus" and "shortage" determinations from year to year. This case concerns challenges to those guidelines by the Navajo Nation ("Nation"), a federally recognized Indian tribe.

         The Nation occupies vast reservation lands along the Colorado River but has no judicially decreed right to its waters. Aggrieved by its lack of enforceable rights to Colorado River water, the Nation filed suit to challenge the surplus and shortage guidelines, alleging principally that Interior neglected to consider the guidelines' impact on its potential, but as-yet unadjudicated, water rights in the Colorado River and so violated the National Environmental Policy Act ("NEPA"). The Nation also charged Interior with more broadly breaching the trust duties the government owes the Nation by failing to account for or safeguard the tribe's interests in and rights to water in the river. The district court rejected all of the Nation's challenges, which are now raised anew here.

          I. BACKGROUND

         A. The Navajo Nation

         The Nation is a federally recognized Indian tribe whose reservation lands sprawl over 13 million acres in the American Southwest.[1] The Navajo Reservation ("Reservation"), the largest Indian reservation in the United States, was established by treaty in 1868 and grew piecemeal between 1868 and 1934, as lands were added to it by treaty, executive order, and statute. The Reservation covers parts of Arizona, New Mexico, and Utah, and lies almost entirely within the drainage basin of the Colorado River, [2] which demarcates much of the Reservation's western boundary. Aside from the federal government, the Nation is the largest riparian landowner along the Colorado.

         The United States is trustee of the Nation's tribal lands and resources. United States v. Mitchell, 463 U.S. 206, 225 (1983). The Nation's claims in this action arise either directly or derivatively from the alleged breach of fiduciary responsibilities created by this trust relationship.

          B. The Law of the River

         The Colorado River begins in the mountains of Colorado and flows nearly 1, 300 miles to the Sea of Cortez, adjacent to the Sonoran Desert in Mexico, draining an area amounting to almost one-twelfth of the continental United States. Arizona v. California, 373 U.S. 546, 552 (1963). "Much of this large basin is so arid that it is, as it always has been, largely dependent upon managed use of the waters of the Colorado River System to make it productive and inhabitable." Id.

         Because of the Colorado's importance to the West, river water is pervasively managed, regulated, and contested. Interior, through the Bureau of Reclamation, operates large dams and reservoirs that control the flow of the Colorado's waters. Additionally, federal statutory law and regulations, Supreme Court decrees, interstate compacts, state and federal common law, and treaties foreign and domestic affect the allocation and management of the River's waters. This byzantine legal regime is known as "The Law of the River, " the relevant portions of which we summarize below.

         i. The 1922 Compact[3]

         In 1922, seven states entered into an interstate compact to govern the gross allocation of water from the Colorado River. The states wanted to assure that the Colorado became a regular, dependable source of water; they recognized that doing so would require a regional or national solution.[4]

         The Colorado River Compact ("1922 Compact") entered into by the affected states divided the river in two at Lee Ferry, Arizona. 1922 Compact art. II, reprinted in 70 Cong. Rec. 324 (Dec. 10, 1928). The "Upper Basin" States[5](Colorado, New Mexico, Utah, and Wyoming) and the "Lower Basin" States (Arizona, California, and Nevada) would each be entitled to 7.5 million acre-feet per year ("mafy") of water.[6] Id. arts. II-III. This suit concerns water in the Lower Basin only. The Compact stated that it did not establish, alter, or impair any present perfected rights within the States, id. art VIII, nor "affect[] the obligations of the United States of America to Indian tribes, " id. art VII. Commissioners from each state signed the compact, but it became effective under its terms only if ratified by Congress and the legislature of each signatory state. Id. art XI.

          ii. The Boulder Canyon Project Act

         In 1928, Congress addressed the management of the Colorado River through the Boulder Canyon Project Act, 43 U.S.C. § 617 et seq. The Act conditionally approved the 1922 Compact and authorized the Secretary of the Interior to construct a massive dam at Boulder Canyon (now the Hoover Dam) and the attendant water delivery infrastructure (a reservoir, now Lake Mead, and delivery canals) to effectuate the allocations laid out in the 1922 Compact. 43 U.S.C. § 617. The Act also allowed the Secretary to enter into contracts with users for the storage and delivery of water in the Project's reservoir. Id. § 617d.

         Most relevant for our purposes, the Act authorized the three Lower Basin States to negotiate a second compact divvying up their 7.5 mafy share of the Colorado's water-4.4 to California, 2.8 to Arizona, and 0.3 (i.e., 300, 000 afy) to Nevada. If entered into, this agreement would take effect once all three states had ratified the 1922 Compact. Id. § 617c(a).

         The Boulder Canyon Project Act became effective in 1929, after six of the seven states ratified the Compact, see id., and California "irrevocably and unconditionally" covenanted to limit its consumption to 4.4 mafy.[7] Arizona did not ratify the 1922 Compact, so the Lower Basin states never agreed to the second compact that would have apportioned the 7.5 mafy among the three states. See Arizona v. California, 373 U.S. at 561-62. The Secretary nonetheless entered into water contracts with the Lower Basin states.[8] Id. at 562.

         iii. Arizona v. California

         Conflict over Lower Basin water continued between Arizona and California, coming to a boil in 1952 when Arizona sued California in an original action in the Supreme Court. The United States intervened to represent federal interests, including the interests of 25 Indian tribes, [9] and other Basin States intervened as well. Based on the report, findings, and recommended decree of a Special Master, see Arizona v. California, 373 U.S. at 551, the Court issued a decree clarifying each state's rights to Lower Basin water. See Arizona v. California, 376 U.S. 340 (1964) ("1964 Decree").

         The 1964 Decree affirmed the provisional apportionments set out in the Boulder Canyon Project Act. In years when the Secretary determined that 7.5 maf of water was available for release to the Lower Basin states, Nevada was entitled to 0.3 mafy; Arizona to 2.8 mafy; and California to the lion's share, 4.4 mafy. 1964 Decree art. II(B)(1), 376 U.S. at 342. The Decree also parceled out the relative shares each Lower Basin State would get in years in which, "as determined by the Secretary of the Interior, " there was surplus water available.[10]1964 Decree art. II(B)(2), 376 U.S. at 342. If, instead, the Secretary determined in a given year that there was a shortage of water-less than 7.5 maf available in the Lower Basin-the Decree required the Bureau of Reclamation first to "provid[e] for satisfaction of present perfected rights in the order of their priority dates without regard to state lines." Id. art. II(B)(3), 376 U.S. at 342. Then, "after consultation with the parties to major delivery contracts and such representatives as the respective States may designate, [the Secretary] may apportion the amount remaining available for consumptive use in such manner as is consistent with the Boulder Canyon Project Act, " the Decree, and other applicable federal statutes. Id.

         iv. Winters rights

         In addition to partitioning the Colorado River waters among the three Lower Basin States, the 1964 Decree adjudicated the "Winters rights" of five Indian tribes. Winters v. United States held that "when the Federal Government withdraws its land from the public domain and reserves it for a federal purpose, the Government, by implication, reserves appurtenant water then unappropriated to the extent needed to accomplish the purpose of the reservation." Cappaert v. United States, 426 U.S. 128, 138 (1976); see also Winters v. United States, 207 U.S. 564, 577 (1908). The rights to this water-also called "reserved rights"-vest on the original date of withdrawal of the land and trump the rights of later appropriators.[11] Cappaert, 426 U.S. at 138. For Indian reservations, courts look to the treaties, executive orders, and statutes that set aside reservation land for the tribe in question.[12] Winters rights, unlike water rights gained through prior appropriation, are not lost through non-use. Colville Confederated Tribes v. Walton, 647 F.2d 42, 51 (9th Cir. 1981).

         In Arizona v. California, the Supreme Court reaffirmed the vitality of the Winters doctrine, noting that "most of the [reservation] lands were of the desert kind-hot, scorching sands-and . . . water from the [Colorado] would be essential to the life of the Indian people and to the animals they hunted and the crops they raised." 373 U.S. at 599. The Decree awarded five tribes a right to Lower Basin water commensurate with the "practicably irrigable acreage" of each tribe's reservation. Id. at 600; 1964 Decree art. II(D), 376 U.S. at 343-45. Following the Special Master's lead, the Court declined to reach the claims of the other twenty tribes, including the Navajo Nation's. See 373 U.S. at 595. The Decree made clear, however, that it did not affect "[t]he rights or priorities, except as specific provision is made herein, of any Indian Reservation." Id. art. VIII(C), 376 U.S. at 352-53.

          The Supreme Court retained jurisdiction over the suit, 1964 Decree art. IX, 376 U.S. at 353, and, over the next few decades, announced several sequels to the original opinion. See, e.g., Arizona v. California, 460 U.S. 605 (1983) (holding that res judicata barred re-opening the quantification of tribes' Winters rights); Arizona v. California, 530 U.S. 392 (2000) (holding that res judicata did not bar certain claims stemming from reservation boundary disputes); Arizona v. California, 547 U.S. 150 (2006) (consolidating prior decrees and implementing the water rights settlement concerning one Indian reservation).

         C. The Nation's Rights to Water in the Colorado River

         Under the Winters doctrine, when setting aside lands for the Navajo Nation, the United States impliedly reserved for the tribe "the waters without which their lands would [be] useless." Arizona v. California, 373 U.S. at 600. As noted above, in the first iteration of Arizona v. California, the Special Master-and the Supreme Court-declined to reach the Winters claim put forward on behalf of the Nation.[13] Id. at 595. The Nation has in the last half-century repeatedly asserted its right to water in the Lower Colorado, [14] but its potential water rights in the Lower Colorado have never been adjudicated or quantified.

         D. Implementing the Law of the River

         The Secretary "is vested with considerable control over the apportionment of Colorado River waters, " Arizona v. California, 373 U.S. at 593, and is generally responsible for the management and delivery of water from the Colorado pursuant to the Law of the River. Each state's water portion is dictated by the 1964 Decree, as is the allocation of surplus water; Arizona v. California accords discretion to the Secretary to apportion shortfalls in years of shortage, see id. at 593-94. The 1964 Decree also commits the determination of surplus and shortage years to the Secretary. See 1964 Decree, art. II(B)(2)-(3), 376 U.S. at 342.

         The Colorado River Basin Project Act of 1968 required the Secretary to adopt criteria for the coordinated management of Lake Mead and Lake Powell, the reservoirs under the Secretary's management in the Lower Basin. See 43 U.S.C. 1552(a)-(b). These "Operating Criteria" for the coordinated management of the storage reservoirs in the Lower Basin help the Secretary determine whether to declare a shortage or surplus in any given year. See Colorado River Reservoirs: Coordinated Long-Range Operation, 35 Fed. Reg. 8951 (June 10, 1970). Before adopting the challenged guidelines, the Secretary made year-to-year determinations about declaring a shortage or surplus, relying on a varying combination of factors, including the year-end water levels in Lake Mead and Lake Powell, potential run-off conditions, and projected water demands. See Colorado River Interim Surplus Guidelines, 66 Fed. Reg. 7772, 7774 (Jan. 25, 2001) (describing the factors the Secretary historically considered in making shortage and surplus declarations). This ad hoc approach bred uncertainty about the possibility of surplus or shortage in any particular year, which grew untenable as demand for surplus water increased. Id.. To partially remedy this problem, the Secretary first decided to adopt more specific, objective criteria for making the annual determinations regarding surplus water. Id.. Guidelines for determining shortages came later.

         E. The Challenged Surplus and Shortage Guidelines

         i. Surplus Guidelines

         In 2001, the Secretary adopted the Colorado River Interim Surplus Guidelines ("Surplus Guidelines"). The Guidelines would "determine the conditions under which the Secretary would declare the availability of surplus water for use within" the Lower Basin states every year. See Surplus Guidelines, 66 Fed. Reg. at 7773. This declaration and allocation of a surplus, if there was one, were to be consistent with the 1964 Decree, the Colorado River Basin Project Act, and the Operating Criteria adopted pursuant to that Act. The Surplus Guidelines aimed to provide greater consistency and predictability in the Secretary's surplus declarations from year to year, in light of growing (and competing) demands for surplus water, and of California's continued diversion of more than its allotted 4.4 mafy share of Lower Basin water. See id. at 7773-74.

         The Surplus Guidelines pegged the surplus declaration to the year-end water level in Lake Mead. See id. at 7775. If that water level equaled or exceeded the highest "tier, "[15]surplus water would be made available for all types of water uses. At or below the lowest "tier, " a "Normal" or "Shortage" year would be declared and no surplus water would be released. At the middle tier, water would be released subject to use restrictions. See id. at 7780. These "interim" guidelines were set to expire in 2016. See id. at 7773-74, 7780-81.

          Before adopting the Surplus Guidelines and issuing the Record of Decision, the Secretary published a draft environmental impact statement ("EIS") assessing the environmental impacts of four alternatives along with the "No-Action Alternative." See Colorado River Interim Surplus Criteria, Notice of Availability of Draft EIS, 65 Fed. Reg. 42, 028, 42, 029 (July 7, 2000). In December 2000, after receiving comments on its draft, the Secretary issued his final EIS ("FEIS"), [16] and one month later its Record of Decision, adopting the preferred alternative as the Surplus Guidelines. See Surplus Guidelines, 66 Fed. Reg. at 7772.

         During the development of the EIS, the Secretary consulted with various Indian tribes whose lands or water resources lay in the Lower Basin. See Final Environmental Impact Statement, Colorado River Interim Surplus Criteria ("Surplus Guidelines FEIS"), Executive Summary, at 33, 44. Both the Navajo Nation and the Colorado River Basin Ten Tribes Partnership, of which the Nation is a member, submitted comments on the draft, calling it "fundamentally flawed" and "deeply and fatally flawed." Surplus Guidelines FEIS at B-187, B-196. The Nation complained that the proposed Surplus Guidelines did not account for its unquantified rights in the Lower Basin and fostered reliance by third parties on water to which it was, or would or could be, entitled. Id. at B-187 to B-190. The Ten Tribes objected to the lack of consideration of "Indian Trust Assets" and claimed that the Guidelines would generally frustrate the development and protection of Indian water rights. Id. at B-196 to B-215.

         The Secretary responded that it was actively assisting tribes in obtaining their water rights, and it disagreed that the Guidelines would hamper or decrease incentives to develop Indian water rights in the Lower Basin. Id. at B-189; B-203 to B-205. "The Department does not believe this proposed action would preclude the Tribes or any entitlement holder from using their Colorado River entitlement. The ...

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