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American Indian Water Rights in Arizona: From Conflict to Settlement, 1950--2004

ProQuest Dissertations and Theses, 2011
Dissertation
Author: Daniel Killoren
Abstract:
The rights of American Indians occupy a unique position within the legal framework of water allocations in the western United States. However, in the formulation and execution of policies that controlled access to water in the desert Southwest, federal and local governments did not preserve the federal reserved water rights that attached to Indian reservations as part of their creation. Consequentially, Indian communities were unable to access the water supplies necessary to sustain the economic development of their reservations. This dissertation analyzes the legal and historical dimensions of the conflict over rights that occurred between Indian communities and non-Indian water users in Arizona during the second half of the twentieth century. Particular attention is paid to negotiations involving local, state, federal, and tribal parties, which led to the Congressional authorization of water rights settlements for several reservations in central Arizona. The historical, economic, and political forces that shaped the settlement process are analyzed in order to gain a better understanding of how water users managed uncertainty regarding their long-term water supplies. The Indian water rights settlement process was made possible through a reconfiguration of major institutional, legal, and policy arrangements that dictate the allocation of water supplies in Arizona.

TABLE OF CONTENTS

Page

LIST OF TABLES ................................ ................................ ................................ x

LIST OF FIGURES ................................ ................................ ............................. xi

PREFACE...... ................................ ................................ ................................ .... xii

CHAPTER

1

THE WATER RIGHTS REG IME IN ARIZONA AND T HE WESTERN UNITED STATE S ................................ ................... 1

Introduction ................................ ................................ .................. 1

Considerations of Equity in Water Allocation ................................ 3

Water Rights Principles in the Western Un ited States ..................... 6

Western Land and Water Utilization ................................ ............. 11

The Development of a Water Rights Structure in Arizona ............. 17

Conclusion ................................ ................................ .................. 24

2

ARIZONA'S MID - CENTURY TRANSFORMATI ON AND INDIAN WATER RIGHTS CONFLICT PRIOR TO ARIZONA V. CALIFORNIA ................................ ................................ ........ 27

Introduction ................................ ................................ ................. 27

Water Rights in a Growing Economy ................................ ............ 29

Arizona Water Use at Mid - Century ................................ ............ 34

vi

CHAPTER

Defending Federal Water Rights ................................ .................. 40

Defining the Federal - State Relationship in Wa ter Regulation ........ 49

Indian Water Rights Controversies in Arizona .............................. 56

An Exercise of Tribal Sovereignty: The Smith Park Dam Incident .. 57

Testing the Boundaries of State Control: The Gila River Indian Community Groundwater Controversy ................................ ........ 64

The Transferability of F ederal Water Rights: The Fort McDowell/Paradise Valley Water Company Contract ................... 73

Flashpoint: Smith Park Dam and the Renewal of Water Rights Adjudications in Arizona ................................ .............................. 78

Conclusion ................................ ................................ ................... 82

3

FROM LITIGATION TO N EGOTIATION: INDIAN W ATER RIGHTS IN THE WAKE O F AR IZONA V. CALIFORNIA ......... 85

Introduction ................................ ................................ ................. 85

Early Attempts at Settlement ................................ ....................... 87

Arizona v. California ................................ ................................ .... 94

Water Rights in the Wake of Arizona v. California ...................... 103

The Search for “New” Water: The Salvage Settlement ................. 107

A Return to the Negotiating Table ................................ ............. 117

vii

CHAPTER

Ch anging Federal Indian Policy and the Salt River Agreement ...... 125

Conclusion ................................ ................................ ................ 133

4

DIVIDING A LARGER WA TER PIE: THE CENTRAL ARIZONA PROJECT AND WATER RI GHTS ADJUDICATIONS ......... 136

Introduction ................................ ................................ .............. 136

The “War on Poverty” in Indian Country ................................ . 138

Tapping a New Water Source: Authorizing the Central Arizona Project ................................ ................................ ....................... 149

Dividing the Water Pie: The Central Arizona Project Allocation Process ................................ ................................ ...................... 154

A Legislative Approach: The Five Tribes Settlement Bill ............ 167

The Ak - Chin Water Rights Settlement ................................ ........ 173

Determining the Rules of the Game: The Jurisdictional Battles over State General Stream Adjudication ................................ .............. 179

Raising the Stakes for Adjudication ................................ ............. 187

Conclusion ................................ ................................ ................. 197

5

THE BEGINNING OF THE SETTLEMENT ERA: WAT ER RIGHTS ADJUDICATION AND THE MOVE TOWARDS

NEGOTIATION ................................ ................................ .... .199

viii

CHAPTER

Introducti on ................................ ................................ ............... 199

State General Stream Adjudication ................................ .............. 201

The Opening of the Settlement Era ................................ ............. 233

Closing the Water Budget ................................ ........................... 228

Confirmation of Rights ................................ ............................. 241

Funding the Settlement ................................ ............................... 246

Authorization ................................ ................................ ............ 251

Conclusion ................................ ................................ ................ 255

6

INDIAN WATER RIGHTS SETTLEMENTS AND THE POLITICS O F REALLOCATION ................................ ............................ 258

Introduction ................................ ................................ ............... 258

Water Transfers ................................ ................................ ......... 261

The Federal Role in Reallocation: The Ak - Chin Settlement of

1984 ................................ ................................ .......................... 266

A New Era in Indian Settlement Negotiations Increase ................ 271

Central Arizona Project Reallocation and The Fort McDowell Indian Commun ity Settlement ................................ .............................. 274

A Limited Approach to Settlement: The San Carlos Apache Tribe Settlement ................................ ................................ ................. 282

ix

CHAPTER

Central Arizona Project Reallocation and the Economics of Western Water Policy ................................ ................................ ............. 296

Testing the Reallocation Model: The Gila River Indian Community Wat er Rights Settlement ................................ ............................. 302

The Water/Money Nexus in the Central Arizona Project Repayment Dispute ................................ ................................ ..................... 309

The Role of Water Marketing: Lease and Exchanges Agreements . 319

Forging the Basis for Future Settlements: The Arizona Water Settlements Act ................................ ................................ ......... 322

Conclusion ................................ ................................ ................. 3 24

7

LESSONS FROM THE SET TLEMENT ERA ............................... 326

The Desire for Certainty ................................ ........................... 326

Addressing Supply Uncertainty ................................ ................. 327

Negotiation v. Settlement ................................ ........................... 328

Achieving Finality ................................ ................................ ..... 331

Expanding the Pie ................................ ................................ ....... 333

Creating Shared Interest ................................ ............................. 335

REFERENCES

................................ ................................ ................................ 338

BIOGRAPHICAL SKETCH ................................ ................................ ............ 347

x

L IST OF TABLES

Table Page

1.

BIA Reservation Water Requirements ................................ ........... 121

2.

1975 CAP Indian Allocation ................................ ........................... 164

3.

CAP Indian Contract s ................................ ................................ .... 260

4.

Gila River Indian Community Water Budget ................................ ... 318

xi

LIST OF FIGURES

Figure Page

1.

Selected Watersheds and Indian Reservation s in central Arizona ........ 32

2.

Selected Reservoirs and Dams in central Arizona .............................. 33

3.

Runoff from the Salt and Verde rivers/SRP Storage Levels,

1940 - 1951 ................................ ................................ ...................... 38

4.

Hawley Lake (Smith Park Dam), c. 1960 ................................ .......... 90

5.

Salt River Reservoir District an d Salt River Valley Cities ................. 194

xii

PREFACE

The legal nature of Indian water rights, and the close proximity in time of the events under study, made the production of a detailed historical account difficult without accessing sources of information that are no t part of the public record. Both private and public institutions have enacted policies that ensure much of the documentary sources of information on this topic will remain inaccessible to researchers well into the future. This includes the National Archiv es and Records Administration, which declined to make available certain records from the Classified Subject Files of the Department of Justice concerning Indian water rights issues in Arizona during the 1950s and 1960s. If materials from this period still retain their confidential status, one can only speculate when the records generated in the 1980s and 1990s will be made available for scholarly analysis. Therefore, this study relied greatly on the assistance of individuals and institutions that made avail able confidential sources, on a restricted basis, in order to further my research.

I made every effort to locate public records for key details and to document the source of critical information. However, in several instances, confidential sources were the only means of reconstructing a particular event or topic. Rather than omit information that was central to my analysis, I included the information without citations in order to retain the confidentiality of the parties

xiii

who were involved in the settlement process. I accept all responsibility for any errors of fact or assertion and these should not reflect on the individuals or institutions that opened their records.

I would like to recognize the assistance offered by several entities in making available the ir research materials. The Salt River Project granted me access to confidential records under a consulting agreement that allowed the Project to retain the confidential nature of its records and legal strategies while allowing me the freedom to pursue my r esearch interests. Representatives from the Department of the Interior Solicitor’s Office, Phoenix Field Office and the Arizona Department of Water Resources were also kind enough to make available files that are not readily available to the public. The Fi eld Solicitor’s files were particularly helpful in illuminating the actions of the federal government in Indian water rights litigation and settlement negotiations during this period.

I also made an effort to supplement the information available in the pub lic record in order to provide a more inclusive view of the settlement process. I conducted interviews with over twenty individuals who represented local, state, federal, and tribal parties in settlement negotiations. The information, insights and perspect ives related by these individuals during the interview process were critical to my analysis. Direct quotes are used periodically in the study, but in most instances the information gathered from these interviews is not cited.

1

Chapter

1

THE WATER RIGHTS REG IME IN ARIZONA AND T HE WESTERN UNITED STATES

Introduction

An Indian water right, as the name suggests, is a concept that deals fundamentally with a legal entitlement to water. However, the value of a water right does not rest in its legal definition, but rather in the ability to act on that right and make use of water to further economic, social, and cultural ends. The history of water use by indigenous peoples in Arizona and other Western states during the late 19 th and 20 th centuries presents one of the clearest examples of access to water falling short of legal entitlements. The inability of Indian communities to access the single most important natural resource in an arid region restricted economic activity and contributed to a low standard of living o n many Indian reservations. Understanding the reasons for the disparity between access and rights, and the subsequent divergence in the economic fortunes of Indian and non - Indian communities, requires an exploration of the major policies, institutions, and

individuals that determined who was given access to the region’s water supplies and how that water could be used.

2

In the development and implementation of water policies, the federal government, and later local governments, corporations, and individuals a cting under its authority, did not recognize the unique legal rights of Indian communities. The failure of the federal government to fully comprehend the implicit water right it granted Indian reservations as part of their creation resulted in Indian popul ations receiving a small share of the benefits from federal investments in water storage and delivery infrastructure, which also helped to solidify a water allocation structure that did not fully account for or protect the reserved rights that attached to Indian reservations. Consequentially, the tremendous population growth and economic development of non - Indian communities in the Western United States occurred at the expense of Indian communities whose water rights remained as unrecognized legal claims.

T he process of resolving Indian water rights claims in Arizona required first and foremost an acknowledged by the major local, state, and federal stakeholders that Indian water rights existed and needed to be fulfilled. However, a simple recognition of the Indian claims was not enough, particularly when these claims challenged the legal basis of water supplies being utilized by existing users. In order to satisfy Indian water rights without causing serious damage to existing users, the effected parties devel oped mechanisms that reconfigured water allocation arrangements in a way that redistributed the benefits derived from over

3

a century of investments in water storage and delivery infrastructure. On the surface, Indian water rights dealt primary with legal i ssues, but the process utilized to resolve tribal claims in Arizona considered social, economic, and political factors to enact fundamental changes in water distribution and management.

Considerations of Equity in Water Allocation

The process undertaken i n Arizona and several other Western states during the late 20 th century and early 21 st century to recognize and ultimately fulfill Indian water rights claims highlights changing perceptions of equity among the stakeholder groups who dictate water allocatio n arrangements. While the role that equity plays in shaping policy actions is often not acknowledged explicitly by the various water management professionals in the state, it does offer a critical lens to analyze how changes in water allocation arrangement s resulted from the challenges lodged by Indian communities. The process of resolving Indian claims demonstrates that perceptions of equity, held both by Indian and non - Indian entities, are not simply a reflection of the overall distribution of water, but rather are formed around complex judgments about how the rules that underlie water allocation and the assignment of rights are determined. Satisfying Indian water rights claims required water management entities and Indian communities in

4

Arizona to reconfi gure the institutional structures that govern water allocation to align with changing perceptions of equity, justice, and fairness.

Conceptions of equity are formed around normative judgments that establish situational dynamics in all areas of social, cult ural, and political life. 1 A survey conducted in Australia found that public perceptions of fairness in water allocation utilized both procedural and distributive forms of justice depending on whether any given decision was applied in a limited situation o r universally. 2

Lauderdale writes that “[j]ustice, then, is a concept that is useful when we examine how it is constructed in different social and political situations and how it is used as a source of legitimation for the development and uses of rules suc h as law.” 3 Thus, conceptions of equity are formed not only around final outcomes, but also the system of rules that determines how the outcomes are derived. The ability of different stakeholders to influence the procedural elements that dictate how polici es and institutions operate and evolve over time is critical to

1 A. Dan Tarlock, “Environmental Protection: The Potential Misfit Between Equity and Efficiency,” University of Colorado Law Review 63 (1992): 882.

2 G.J. Syme, B.E. Nancarrow and J.A. McCreddin, “Defining the Component s of Fairness in the Allocation of Water to Environmental and Human Uses,” Journal of Environmental Management 57 (1999): 53.

3 Pat Lauderdale, “Justice and Equity: A Critical Perspective,” in Rutgerd Boelens, Gloria Davila and Rigoberta Menchu, eds., Sea rching for Equity: Conceptions of Justice and Equity in Peasant Irrigation (Assen, Netherlands: Van Gorcum, 1998), 7.

5

understanding the relative equity of a particular environment or system. The history of Indian water rights in Arizona offers a case study for analyzing how regional stakeholders responded to a long - standing inequity by reconfiguring water allocations to address a major category of unfulfilled rights.

The resolution of Indian water rights claims provides one of the best opportunities to analyze how federal, state, local, and tribal parties defi ne priorities in policy formation and institutional reconfiguration. This study focuses on the individuals, institutions, practices, and policies that influenced the settlement process and has the potential to yield important insights into how social and p olitical structures reflect stakeholders' conceptions of equity in other areas of water policy and management. The magnitude of the threat to existing water allocation arrangements presented by Indian claims resulted in a number of important trade - offs and reforms that realigned the power structures that govern water policy decisions. One outcome of this process was a growing realization on the part of policymakers that the region’s water resources would not be able to support the full range of historic use s within existing cost and allocation structures. The negotiation of American Indian water rights claims offered a unique venue for regional stakeholders to reconsider the priorities that would be used to guide the future direction of water allocation and use. Equity was defined at various stages in this process as a method of navigating difficult trade - offs that

6

would yield a cumulative settlement more agreeable than the existing framework.

Water Rights Principles in the Western United States

The water r ights of Indian reservations rest upon a different set of legal precedents than the rights of other water users in Arizona and the West. Indian water rights are derived from the principle of federal reserved rights, which is predicated on the notion that t he federal government, in reserving a portion of the public domain for federal uses, implicitly reserves water to support the purposes for which the land was set aside. 4 In the case of most Indian reservations, the intent of Congress and the Executive Bran ch was to create permanent homelands for native peoples and to provide both water and land for the present and future needs of residents. 5 The federal government acts in its capacity as owner of the public domain to create a reservation and to withhold wat ers that would otherwise be available for appropriation by individuals in accordance with state laws. 6

However, the full measure of the water right set aside in creating an Indian

4 Felix S. Cohen, Handbook of Federal Indian Law (Washington D.C.: Government Printing Office, 1942), 216 - 217.

5 Larry Long and Clay Smit h, eds., American Indian Law Deskbook: Conference of Western Attorneys General , 4 th ed. (Boulder: University of Colorado Press, 2008), 339 - 341.

6 Federal ownership of public lands is derived from Article 4, Section 3 of the U.S. Constitution, commonly ref erred to as the Property Clause.

7

reservation was not specified. Since the rights are intended to meet both cu rrent and future needs, a portion of the water covered under the entitlement often remains unused for a period of time, which makes it vulnerable to appropriation by a later user if the right is not protected. The U.S. Congress and the President failed to adequately protect the underlying water rights for Indian reservations because they did not understand the nature of these rights.

Policy makers and water users overlooked federal reserved rights in large part because they did not adhere to the legal doctr ine that governed the water allocation process for non - Indian populations in the West. Appropriations in most Western states are governed by the prior appropriation doctrine, which Donald Pisani referred to as “[t]he greatest legal innovation in the histor y of the arid West…” 7 because of the tremendous economic, political, and cultural changes it facilitated. Prior appropriation is based on the simplified principle of “first in time, first in right,” which grants a priority right to the earliest user of a w ater source. 8 The system is designed to protect investments that are made to utilize an available water supply from diminishment by later users as long as the senior user

7 Donald J. Pisani, To Reclaim a Divided West: Water, Law, and Public Policy, 1848 - 1902 (Albuquerque: University of New Mexico Press, 1992), 11.

8 Wells A. Hutchins, Water Rights Laws in the Nineteen Western States (Clark , NJ: Lawbook Exchange, 2004), 437 - 467.

8

continues to put the water to a beneficial use. 9 The system prioritizes the point in time at which appropriations are made instead of the purpose or value for which the water is used. 10

The water rights of Indian communities were not recognized earlier because the case law that defined the nature of these rights was not established until th e early twentieth century, well after most reservations were already created and non - Indian settlement and water resources utilization was occurring in the West. 11

The single most important legal decision in Indian water rights history came in the Winters v . United States case of 1908, which dealt with the Fort Belknap Indian Reservation in Montana. 12 The U.S. Supreme Court ruled that the federal

9 ARS 45 - 181(1) states: “ Beneficial use includes but is not limited to use for domestic, municipal, recreation, wildlife, including fish, agricultural, mining, stockwatering and power purposes. ARS 45 - 141(B) states: “beneficial use shall be the basis, measure and limit to the use of water. An appropriator of water is entitled to beneficially use all of the water appropriated on less than all of the land to which the water right is appurtenant, and this beneficial use of the water appropriated does not result in the abandonment or forfeiture of all or any portion of the right.” For a discussion of the beneficial use doctrine in the Western United States see Hutchins, Water Rights Laws in the Nineteen Western States , 9 - 11.

10 Marc Reisner and Sarah Bates, Overtapped Oasis: Reform or Revolution for Western Water (Washington D.C.: Island Press, 1990), 64 - 65.

11 Harold A. Ranquist, “The Winters Doctrine and How it Grew: Federal Reservation of Rights to the Use of Water,” Br igham Young University Law Review 3 (1975): 639 - 724.

12 For more background of the circumstances surrounding the Winters case see John Shurts , Indian Reserved Water Rights: The Winters Doctrine in its Social and Legal Context, 1880s - 1930s (Norman: Universi ty of Oklahoma Press, 2000);

9

government intended to set aside water as part of the 1888 treaty that created the reservation, even though it was not mentioned explicitly. The court based its decision on the rationale that land in an arid region is of little value without appurtenant water rights. Therefore, the creation of the reservation carried with it an implicit right to the water flowing acro ss the land. When Congress admitted Montana into the United States a year later, in 1889, and granted the state government authority to regulate water within its boundaries, the Fort Belknap reservation continued to retain its rights. 13 However, the water a llocation structure of most Western states was well developed, and significant financial resources were expended on water infrastructure, by the time the Winters case was decided. The impact of the decision was therefore diminished because applying its pro visions would require taking water away from individual who were already putting it to use, a decision the federal government was reluctant to make. 14

Further weakening the immediate impact of the Winters decision was the unresolved question of whether the federal reserved rights principle applied to

Norris Hundley, Jr., “The ‘Winters’ Decision and Indian Water Rights: A Mystery Reexamined,” Western History Quarterly 13, no. 1 (1982): 17 - 42.

13 Winters v. United States, 207 U.S. 564 (1908).

14 David H. Getches, “Defending I ndigenous Water Rights with the Laws of a Dominant Culture: The Case of the United States,” in Liquid Relations: Contested Water Rights and Legal Complexity , Dik Roth, Rutgerd Boelens and Margreet Zwarteveen eds. (New Brunswick, NJ: Rutgers University Pres s, 2005), 47 - 50.

10

Indian reservations. In 1939 the U.S. Ninth Circuit Court of Appeals addressed this question and extended the implied water right to those reservations created by statute and executive order in the case of Unite d States v. Walker River Irrigation District . 15 The court stated,

In the Winters case...the basic question for determination was one of intent -- whether the waters of the stream were intended to be reserved for the use of the Indians, or whether the lands on ly were reserved. We see no reason to believe that the intention to reserve need be evidenced by treaty or agreement. A statute or an executive order setting apart the reservation may be equally indicative of the intent. 16

The extension of the reserved rig hts doctrine to all federal reservations, including Indian reservations, greatly expanded its reach because of the large quantity of federal land located within Western state boundaries. 17

After establishing that the federal reserved rights principle applie d to all Indian reservations, the question still remained about the method that should be used to quantify these rights. This issue was not addressed in the Winters decision or in subsequent court rulings in the half century that followed. It was not until 1963, when Western development

15 United States v. Walker River Irrigation District, 104 F. 2d 334 (1939).

16 Ibid.

17 As of 1950, 69.43% of the total land area in Arizona was designated as federal lands. The percentage of federal lands in Idaho, Nevada, Oregon, Texas, Utah and Wyoming each exceeded 50% of the total land area. See H. R. Rep. No. 81 - 3116 (1950).

11

was accelerating at its fastest pace, that the U.S. Supreme Court in Arizona v. California handed down for the first time a standard for quantifying federal reserved rights claims. 18 Prior to this ruling, many Western water u sers still did not fully recognize the magnitude of the water rights claims that could be made on behalf of Indian communities or the effects these claims might have on water rights acquired under state laws. 19 The federal government contributed to the lack of recognition and understanding of federal reserved rights by adopting policies that supported the appropriation of Western water resources by non - Indians.

Western Land and Water Utilization

The basic tenants of the federal reserved rights and prior app ropriation doctrines reflect differing approaches to the allocation and use of water in an arid environment. Federal reserved rights allow for the growth in future water use

18 State of Arizona v. State of California et al., 373 U.S. 546 (1963).

19 Many non - Indian water users in the West became concerned in the early 1950s about the e xtent of the federal authority to reserve water in light of several court decisions. Indian water rights claims represented just one type of federal claim that could be made on Western water sources. State officials opposed these claims on the basis that t he federal government gave the authority to regulate water to the states. Proceedings from the annual meetings of the Colorado River Water Users Association [CRWUA] provide a good gauge of the level of concern on the part of non - Indian water users in Weste rn states. See for example: Burnham Enersen, “State Versus Federal Water Rights: Speech before the CWRUA Annual Meeting,” 1958, Salt River Project [SRP] Research Archives, Phoenix.

12

because they are intended to provide for the changing needs of people on a defined

area of land. Water covered under these rights can be used for a variety of purposes and the place and type of use can change over time without affecting the underlying entitlement. In contrast, prior appropriation requires the continuous use of a fixed q uantity of water because it assumes a scarcity of supply. In an effort to avoid waste, the prior appropriation system preserves the senior right insofar as it continues to be put to a beneficial use. The two doctrines are not fundamentally in opposition to one another. However if reserved rights are not recognized when the priority of rights is determined within the prior appropriation system then water users will use the full amount of water without accounting for the reserved rights. Allowing the two doct rines to proceed side - by - side made the task of enforcement almost impossible because there was no single standard that could be applied equally to determine the priority and quantity of rights. 20

The differences in the two legal doctrines were amplified by government policies that supported the appropriation of water by non - Indians without regard for existing federal reserved rights. The source of this conflict traces its origins to a

Full document contains 362 pages
Abstract: The rights of American Indians occupy a unique position within the legal framework of water allocations in the western United States. However, in the formulation and execution of policies that controlled access to water in the desert Southwest, federal and local governments did not preserve the federal reserved water rights that attached to Indian reservations as part of their creation. Consequentially, Indian communities were unable to access the water supplies necessary to sustain the economic development of their reservations. This dissertation analyzes the legal and historical dimensions of the conflict over rights that occurred between Indian communities and non-Indian water users in Arizona during the second half of the twentieth century. Particular attention is paid to negotiations involving local, state, federal, and tribal parties, which led to the Congressional authorization of water rights settlements for several reservations in central Arizona. The historical, economic, and political forces that shaped the settlement process are analyzed in order to gain a better understanding of how water users managed uncertainty regarding their long-term water supplies. The Indian water rights settlement process was made possible through a reconfiguration of major institutional, legal, and policy arrangements that dictate the allocation of water supplies in Arizona.