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IN THE WATER COURTS OF THE STATE OF MONTANA LOWER MISSOURI DIVISION SAGE CREEK * * * * * * * * * * * * * * * * * * * * * * IN THE MATTER OF THE ADJUDICATION OF THE EXISTING RIGHTS TO THE USE OF ALL THE WATER, BOTH SURFACE AND UNDERGROUND, WITHIN THE SAGE CREEK DRAINAGE AREA INCLUDING ALL TRIBUTARIES OF SAGE CREEK IN LIBERTY AND HILL COUNTIES, MONTANA. ) ) ) ) ) Case No. 40G-1 WATER MASTER'S REPORT REGARDING ISSUANCE OF A PRELIMINARY DECREE IN THE SAGE CREEK BASIN Procedural Introduction The United States Department of Justice objected to the December 15, 1983 issuance of a Preliminary Decree for the Sage Creek Basin stating that "the Preliminary Decree for the Sage Creek Basin affects waters which are a part of the United States' claim on behalf of the Cree and Chippewa Indian Tribes of the Rocky Boy's Indian Reservation (Tribes)." Notices of Intent to Appear upon this objection were made by H.E. Sorenson; Thomas E. Leubben of behalf of the Chippewa-Cree Tribe, Rocky Boy's Reservation; Katherine J. Johnson; and Sorenson Farms, Inc. Johnson, Sorenson and Sorenson Farms filed Withdrawals of Notices of Intent to Appear on August 14, 1984 prior to the First Prehearing Conference held at 9:00 a.m. On August 14, at 12:55 p.m. the Water Master signed an Order designating the Preliminary Decree as a Temporary Preliminary Decree, the Order to be expanded. The United States, in their objection, requested the suspension of the Preliminary Decree during the pendency of negotiations between the Tribe and the State of Montana, saying, the suspension of the Preliminary Decree "does not prevent the Court from issuing an 'Interlocutory Decree or other temporary decree if such a decree is necessary for the orderly adjudication of water rights prior to the issuance of a Preliminary Decree.' MCA 85-2-231 (1) (d)." The Chippewa-Cree Tribe filed a motion asking the Court to "rescind its Order of December 15, 1983... or, in the alternative, upon a showing of extreme administrative necessity, to substitute an Interlocutory Decree for the Preliminary Decree and suspend further proceedings until the requirements of 85-2-231 have been fulfilled." Relevant Legislation Montana Statute governing the adjudication process has several sections giving guidance to compacting and adjudication procedures required to protect the integrity of reserved Indian water rights. MCA 85-2-217 reads, in part, "While negotiations for the conclusion of a compact under part 7 are being pursued, all proceedings to generally adjudicate reserved Indian water rights and federal reserved water rights of those tribes and federal agencies which are negotiating are suspended." MCA 85-2-231 (1) (c) and (d) reads, in part: "The water judge shall issue a preliminary decree. The preliminary decree shall be based on:... -2- (c) the contents of compacts approved by the Montana legislature and the tribe or federal agency or, lacking an approved compact, the filings for federal and Indian reserved rights:... (d) This section does not prevent the water judge from issuing an interlocutory decree or other temporary decree if such a decree is necessary for the orderly administration of water rights prior to the issuance of a preliminary decree." Also relevant is 1979 Mont. Laws Ch. 697, Sec. 1 declaring as the purpose of enactment of the legislation governing the adjudication process: "to expedite and facilitate the adjudication of existing water rights." In summary, while a tribe is negotiating regarding its reserved Indian water, adjudication proceedings regarding that water are suspended and those rights, in the form of an approved compact or of filings of claims for such rights are to be included in the Preliminary Decree issued in the particular basin where those rights occur. Further, as both the United States and the Chippewa-Cree Tribe have pointed out, Montana Statute does not prevent the issuance of an Interlocutory Decree prior to the issuance of a Preliminary Decree. Finally, procedures should expedite the adjudication process. General Issues Before The Court The Court must first ascertain whether Indian reserved water rights occur in the Basin while negotiations are in process. If that is found, procedures consistent with the Statute must be adopted to protect the integrity of those rights. -3- Issue #1: The Occurrence of Reserved Indian Water Rights Within The Basin In support of its objection, the United States Department of Justice submitted exhibits, affidavits, maps and title status reports prepared pursuant to C.F.R. 150.10. This material shows both that the Chippewa-Cree Tribe is in the process of negotiating its reserved water rights with the State of Montana (exhibit 4) and the presence of Indian reserved water within the basin. An analysis of the latter finding is necessary. Exhibit 1C shows the existence of 120 acres in Sections 13 and 14 of Township 30, Range 13 East lying directly across Sage Creek as it flows into the Big Sandy River. Exhibit 2B, a United States Department of the Interior map, shows this to be within the Rocky Boy's Indian Reservation. The file also shows that this land was withdrawn from the public domain and added to the Rocky Boy's Indian Reservation by Act of Congress. 53 Stat. 552. An undetermined amount of this tract is within the Sage Creek Basin. Does the presence of this land make a showing of Indian reserved water rights within the Sage Creek Basin? Indian reserved water rights appurtenant to an Indian Reservation created out of public lands have been found by implication where water is necessary to satisfy the purpose of that reservation. Winters v. the United States, 207 U.S. 564 (1908). Report from Simon H. Rifkind, Special Master, to the Supreme Court in Arizona V. California, 257 (Dec. 5, 1960). -4- When Winters was followed in Arizona v. California, 373 U.S. 546 (1963), decree entered, 376 U.S. 340 (1964), the Court explained the Winters Case in this way: "The Court in Winters concluded that the Government, when it created Indian Reservations, intended to deal fairly with the Indians by reserving for them the water without which their lands would have been useless." Indian lands to which the concept has been applied are reservation lands to which Indians have retained use and occupance after ceding surrounding lands to the United States Government, Winters, as well as Reservations created by Executive Order and Act of Congress, additional situations in Arizona v. California. The land specified in 1C clearly fits within a framework found by the United States Supreme Court to be subject to reserved Indian water. It is land withdrawn from the public domain by Act of Congress to be added to the Rocky Boy's Indian Reservation. The United States Government was unable to inform the Court of the history of title of any of these tracts, but even if this particular piece of land had been removed from and returned to trust status, it is the subject of a reserved Indian water right. 1 United States v. Anderson, (9th Cir. July 10, 1984.) 1 It is unnecessary to determine whether the usual standard of irrigable acres exists upon these 120 acres. Such a demand was not made in Winters. In Arizona v. California, water needs related to agriculture, stock and domestic uses were found to be purposes for which those arid, agricultural reservations were created. (Rifkind Report, p. 260). Such uses can be assumed to be present on these 120 acres without a factual inquiry. It is also unnecessary to ascertain whether the other five tracts of land are subject to federal reserved water rights. Although further proof is needed to ascertain the presence of Indian reserved water on those lands, the issue is the presence of any Indian reserved water within the basin. -5-- Issue #2: Procedures Required By The Occurrence of Indian Reserved Water in the Basin What proceedings, then, are required to accomodate the occurrence of Indian reserved water within the Sage Creek Basin? And beyond the required procedures, what should be done to best protect the interests of all parties? The motions before the Court are in essence ones for a rescission of the Preliminary Decree, issuance of an Interlocutory Decree with no continued proceedings, or issuance of an Interlocutory Decree with the possibility of continued proceedings. All of these motions would result in issuance of a Preliminary Decree incorporating Indian reserved water rights at a later time. The following arguments are made to the Court: The Tribe asserts that, 1) the Water Court lacks jurisdiction to issue a Preliminary Decree as defined by MCA 85-2-231, until Indian water rights are included in the form of a compact or claims filed with the Court, 2) because it is unable to participate fully in hearings on a Preliminary Decree, the Tribe is deprived of due process, and 3) hearings on the Preliminary Decree in the absence of full participation of the parties claiming reserved rights constitutes a piecemeal adjudication for which the Court lacks jurisdiction under the McCarran Amendment. In its brief, the Tribe also asserts that an Interlocutory Decree could be issued only upon a showing of administrative necessity or extraordinary circumstances. As part of its due process argument, it also asserts that there are no procedures in place for an -6- Interlocutory Decree and fears that future litigation could deprive the Tribe of an opportunity to be heard upon objections to the Preliminary Decree. The Justice Department argues that once a determination is made that a Tribe is negotiating with the State and that waters are to be the subject of claims for Indian reserved water rights, the Court may not proceed to adjudicate such rights. It is necessary to examine the motions before the Court and the procedures provided by statute and Water Court rule for each, in light of the issues raised by the Justice Department and the Tribe. Suspension of the Preliminary Decree and Issuance of Interlocutory Decree and Proceedings This motion is made by the Justice Department, should issuance of an Interlocutory Decree be necessary for the orderly administration of water rights. Contrary to the Tribe's understanding, procedures are in place for such proceedings. Water Court rule 10 provides that an Interlocutory Decree be subject to identical procedures as provided by statute and rule for a Preliminary Decree. Such procedures are now in place in basins now being adjudicated. A 90 day objection period follows the issuance of an Interlocutory Decree, notice is then given to everyone in the basin that objections have been made and opportunity given for persons to give notice of intent to appear upon those objections, and hearings are then held upon objections. Findings of Fact and Conclusions of Law resulting from these controversies are incorporated with the contents of compacts or -7- claims for federal reserved water rights in a Preliminary Decree. The same objections and notice procedures then follow. In this procedural scheme, objections following a Preliminary Decree can be made only to those water rights affected by the addition of federal reserved water rights. Water Court rule 6 reads, in part: "Procedure for Filing Objections to the Preliminary Decree: 1. A person named in a preliminary decree, or other person for good cause shown, may object to the preliminary decree and request a hearing before the Water Courts. For purposes of filing an objection, "good cause shown" shall include: A showing that one has a substantial reason for objecting, which means that the party has an interest that has been affected by the preliminary decree and that the objection is made in good faith, is not arbitrary, irrational, unreasonable or irrelevant in respect to the party objecting." (emphasis added). Claimants have a period after the issuance of the Interlocutory Decree to object to any interest affected. The Preliminary Decree, adding federal reserved water rights, can affect the claimant of appropriated water only insofar as the addition of federal reserved water rights has such an affect. Claimants of federal reserved water rights, not having been involved in an Interlocutory Decree, are impacted by the entire Preliminary Decree, including appropriative rights interlocutorilly determined, and can object to any "interest that has been affected by the Preliminary Decree." The two-step procedure has the effect of changing only the timing of objections. If all claims in a basin are initially incorporated in a Preliminary Decree, objections of appropriative claimants to the impacts of appropriative rights and federal reserve rights would be made at the same time. More objections -8- might be made at one time. In the two-step procedure, objections by appropriative claimants to the impact of other appropriative rights and of federal reserve rights are seperated. Whether the process is done in one or two steps makes no difference to the claimant of federal reserve water rights. 2 In either case, all objections are made upon issuance of a Preliminary Decree. A suspension of the Preliminary Decree and issuance of an Interlocutory Decree, with Indian reserve water rights to be incorporated in a future Preliminary Decree, solves problems of the Court's jurisdiction to issue a Preliminary Decree. And because the Tribe could initiate objections to any aspect of the Preliminary Decree, it would participate fully in statutory hearings and would suffer no denial of due process. Suspension of the Preliminary Decree and Issuance of an Interlocutory Decree With No Attendant Proceedings It is unlikely that the legislature would contemplate the issuance of Interlocutory Decrees with no attendant proceedings. But assuming the Court did proceed in this manner, would such a procedure be more advantageous for the Tribe? Current objections before the Court would proceed no further until a Preliminary Decree incorporating the interim proceedings and federal reserved 2 In any procedure adopted, Findings of Fact and Conclusions of Law, should assure participation in the Preliminary Decree by claimants of Indian reserved water found instead to be owners of appropriative rights. Those claimants could not have anticipated their need to make appropriative claims and could not have included claims prior to entry of a Preliminary Decree. -9- water rights were issued. Additional objections could be made by appropriative claimants to the impacts of Indian reserved water rights and claimants of reserved Indian water rights would make objection to the entire Preliminary Decree, the identical procedure that would obtain should proceedings upon an Interlocutory Decree continue. One difference occurs: Controversies vis-a-vis appropriative claimants could not be settled as quickly with attendant problems such as witness availability. Recision of the Preliminary Decree The Tribe seeks a recision of the Preliminary Decree, to be reissued at a later time when reserved Indian water rights can be included. Following the Justice Department's objection to the Preliminary Decree, statutes and rules governing the Water Court demanded that a period of time be observed in which interested persons could file Notices of Intent to Appear upon that objection. During that period, four such notices were filed. Three were withdrawn just before the first scheduled prehearing conference in the matter, leaving only the United States Justice Department and the Chippewa-Cree Tribe before the Court. At that time, when the Water Court could rule upon the Justice Department's objection or the motions made by the Tribe, 157 objections had been filed and numerous Notices of Intent to Appear upon those objections had been made. A decision to rescind the Decree would have the effect of duplicating the time and effort that has been made toward adjudication of the Basin. That should not be considered, however, if a recision -10- is necessary to protect Indian reserved water rights and to conform to the statute, especially when the Tribe is without fault in this matter, and was as powerless as the Court to expedite the process. The Remaining Issues I now address the remaining issues raised by the ChippewaCree Tribe in light of the proceedings available to the Court. They are: 1) the necessity of issuing an Interlocutory Decree, 2) the possibility of future litigation impacting upon the Tribe, 3) the impact of such proceedings upon jurisdiction granted by the McCarran Amendment, and 4) facilitation of the adjudication process. The Necessity of Issuing an Interlocutory Decree The Justice Department asserts that such a decree can be issued if necessary for the orderly administration of water rights prior to the issuance of a Preliminary Decree, the language of the statute. The Tribe asserts that an Interlocutory Decree should be issued only upon a showing of administrative necessity or extraordinary circumstances. It is not necessary for the Court to show extraordinary circumstances, but in this case, such a showing may actually be made. Issuance of an Interlocutory Decree for the protection of claimants of Indian water rights is at least a necessity. In fact, such extraordinary action should be taken for the protection of those rights. The Possibility of Future Litigation Impacting Upon the Tribe The tribe may be concerned about protection of its rights in any future litigation regarding procedures adopted by the Court. (See end of paragraph one of the Tribe's brief in support of its motion). Following the objections of the Justice Department and others to the Preliminary Decree, each claimant in the Basin, federal entities, affected States, affected Indian Tribes, owners of newly appropriated water in the Basin, persons to whom water right transfers were made, and any other person who had requested notice, received a notice that objections had been made and hearings requested. In addition, the notice was published in area newspapers. (Copies of the Order for mailing and the notices are enclosed). All these persons were informed of the availability of a list of those objections. The list was available for inspection in seven places in the Sage Creek Basin and throughout the State. In addition, copies of the list were obtained from the Court. The first objection on the list was that made by the Department of Justice, designating the objection as "reserved Indian rights located in Basin". (A copy of the list is attached). Persons then had 60 days to give the Court notice of an intent to appear upon objections Nine attorneys, other than those involved in this case, are involved in objections in the Sage Creek Basin and 16 claimants represent themselves in objections and notices of intent to appear upon objections. All of these people presumably acquainted themselves with objections in the Basin. Three persons other -12- than the Chippewa-Cree Tribe did file notices of intent to appear regarding the Justice Department's objection and then withdrew. Notice of this matter was given to the basin and no one has chosen to become involved. Is future litigation regarding this matter, by others than the Justice Department or the Chippewa-Cree Tribe, likely or even possible? Statutes and rules governing the Water Court would preclude appeals by appropriative claimants. Extraordinary writs may be available. But one can only guess about the litigation that would result from any of the Courts possible decisions. Why would it be assumed that less litigation would follow the recision of the Preliminary Decree or the suspension of all proceedings than concluding matters before the Court an interlocutory basis? The Impact of Such Proceedings Upon Jurisdiction Granted by The McCarran Amendment The Tribe asserts that McCarran Amendment requirements of a general adjudication can be satisfied only by a recision of the Preliminary Decree or issuance of an Interlocutory Decree with a stay of all proceedings. (See page 2 of the Tribe's brief in support of their motion). Would the Justice Department's motion for a suspension of the Preliminary Decree and issuance of an Interlocutory Decree with continued proceedings meet McCarran Amendment requirements? In U.S. v. District Court for the County of Eagle, 401 U.S. 520 (1971), Justice Douglas held that proceedings supplemental to a general adjudication were part of a general adjudication -13- within the meaning of the McCarran Amendment, even though problems of absent parties might arise. A stay of the Preliminary Decree while some appropriative issues are settled interlocutorily, with objections again available to interests impacted by a Preliminary Decree would satisfy McCarran Amendment requirements of a general adjudication. Although some issues are determined first, all water users in the water shed are in Court at the same time. Miller v. Jennings, 243 F. 2d 157, 159 (1957), quoting People of the State of California v. U.S., 235 F. 2d 647 (9th Cir. 1956). Although substantive McCarran Amendment requirements of a general adjudication are satisfied, the possible inconvenience of making and meeting objections twice are apparent. But the inconvenience falls solely on appropriative claimants, not claimants of Indian water rights. Facilitation of the Adjudication Process It is the intention of the Montana legislature that the adjudication process be expedited. But it is also intended that all proceedings to generally adjudicate reserved Indian water rights of negotiating Tribes are suspended. Facilitation must be read as facilitation of that which is demanded, or facilitation after that is done which is demanded. Conclusion All three of the motions before the Court would cure the defect of the Sage Creek Preliminary Decree issued on December 15, 1983. Either a suspension or a recision of that decree, -14- to be reissued when reserved Indian water rights can be added, would satisfy the requirements of suspension of the general adjudication of those rights. Which procedure, then, would be best for all claimants within the Basin, and, relatedly, which would be most expeditious? Any of the three possible procedures would have the same impact upon claimants of Indian water rights. Their work would begin when a Preliminary Decree is issued containing their rights. If they really fear litigation, a recission would be expected to be the option most likely to trigger that result. A suspension with continued proceedings could have one slight advantage. Many issues of incorrect priority dates, flow and volume will have been raised and corrected before their involvement. Appropriative claimants will be most affected. A recission would result in the reissuance of the December 15, 1983 decree with addition of reserved Indian water rights. These claimants would then start from scratch and make appropriate objections to that decree. An Interlocutory Decree, with the continuation of proceedings of objections before the Court, will have the same impact upon appropriative claimants as an Interlocutory Decree with a complete stay - a second round of objections must be made and met. But should proceedings continue, witnesses and evidence will be preserved in some cases. No appropriative claimants are before the Court to tell us which route is best. But is seems logical that a recission would be most prejudicial, a complete stay somewhat prejudicial -15- and the suspension of the Preliminary Decree and issuance of an Interlocutory Decree with continued proceedings least prejudicial. If claimant effort is related to facilitation, that choice is also the most expeditious. For the above reasons, the Water Master respectfully submits that the Preliminary Decree issued December 15, 1983 in the Sage Creek Basin be suspended until claims for reserved Indian water rights or the contents of a compact regarding Indian reserved water rights are incorporated in a Preliminary Decree pursuant to MCA 85-2-231; that all proceedings to generally adjudicate Indian reserved water rights be suspended until issuance of the Preliminary Decree; that the Court declare the December 15, 1983 Preliminary Decree to be an Interlocutory Decree; that objections currently before the Court and notices of intent to appear made upon those objections proceed as interlocutory proceedings; and that the following Findings of Fact and Conclusions of Law be adopted. FINDINGS OF FACT 1. Reserved Indian water rights occur in the Sage Creek Basin and the Chippewa-Cree Tribe is engaged in negotiations with the State of Montana regarding those water rights. 2. It is necessary and appropriate for the Court to suspend the Preliminary Decree issued in the Sage Creek Basin on December 15, 1983, and to suspend any proceedings to generally adjudicate -16- reserved Indian water rights within the Basin until issuance, pursuant to MCA 85-2-231, of a Preliminary Decree based on the contents of compacts regarding reserved Indian water rights or claims for reserved Indian water rights. 3. It is necessary for the orderly administration of water rights prior to the issuance of a Preliminary Decree, that an Interlocutory or Temporary Decree be issued in place of the Preliminary Decree issued on December 15, 1983. 4. Proceedings upon objections made to the December 15, 1983 Sage Creek Preliminary Decree continue as interlocutory proceedings. This does not harm claimants of reserved Indian water rights and is less harmful to appropriative claimants than other options available to the Court. 5. Interlocutory proceedings are governed by Water Court Rule #11. The same rules and statutes that govern procedure following a Preliminary Decree apply to procedures following an Interlocutory Decree. 6. A Preliminary Decree issued following interlocutory proceedings will contain water rights not objected to as granted in the December 15, 1983 decree, water rights objected to as temporarily determined in interlocutory proceedings, and claims for Indian reserved water rights or compacts regarding Indian reserved water rights. -17- 7. Following the issuance of a Preliminary Decree, objection may be made, pursuant to Water Court Rule 6, for a substantial reason, including having an interest that is affected by the Preliminary Decree. Upon issuance of a Preliminary Decree following an Interlocutory Decree, objection can be made only to interests affected by the addition of claims for Indian reserved water rights or the contents of Indian reserved water right compacts incorporated in the decree. Opportunity has already been had for objection upon all other aspects of the Preliminary Decree. CONCLUSIONS OF LAW 1. The Court has jurisdiction over this matter pursuant to MCA 85-2-211 through MCA 85-2-243. 2. The Chief Water Judge has jurisdiction over this matter pursuant to MCA 3-7-224. 3. Findings of Fact and Conclusions of Law that are part of the Preliminary Decree issued December 15, 1983 in the Sage Creek Basin are generally adopted for interlocutory proceedings except that references to a Preliminary Decree are to be disregarded. 4. All Findings are merged with these Conclusions of Law to give them the force of law in this Report. 41- DATED this 01 day of August, 1984 Sarah Arnott, Water Master -18-
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