The Montana Power Company, incorporated in New Jersey, is engaged in the business of generating and distributing electric power in the state of Montana. It brought suit in the federal court for Montana against the State Water Conservation Board, the individual members thereof, and the Broadwater-Missouri Water Users’ Association (an organization of the settlers in the Broadwater-Missouri irrigation project).
In its complaint the Power Company asserted the right by prior appropriation to the use of all the waters of the Missouri River and its tributaries for the purpose of operating certain hydro-electric plants —seven in number — located on the upper reaches of that stream. It alleged that on June 28, 1938, the defendant State Water Conservation Board had filed a notice of appropriation of 400 second feet of the waters of the Missouri for the purpose of irrigating lands in Broadwater County and for other beneficial purposes; that the Board had completed plans for the construction of a dam and irrigation works to divert the amount of its appropriation at a point above the dams and hydroelectric plants of the plaintiff, and had let or was proceeding to let contracts for, and to construct, a diversion dam across the river with the design of conducting water from the stream for the irrigation of seasonal *999crops; all of which conduct was alleged to be in derogation of the rights of the plaintiff. There was a prayer that the plaintiff’s title to the use of the water of the river be quieted as against the defendants and that they be permanently enjoined from constructing and maintaining the dam and diverting water, or from interfering in any manner with the flow of the stream and plaintiff’s use thereof.
The State Water Conservation Board and its’ members interposed a motion to dismiss on the jurisdictional ground that the action was one against the state of Montana and not one between citizens of different states. The motion was denied, the defendants answered, and after extensive hearings before a special master a decree was entered confirming in the Power Company the right to the use and control of the waters of the Missouri up to a stated maximum flow necessary to operate the power plants of that Company, plus the flow requisite to keep its storage reservoirs filled. The decree permanently enjoined the defendants from diverting, storing, or using the waters of the river except at times when the prior demands of the plaintiff have been satisfied.
The appeal presents a number of important questions of local law affecting the merits of the adjudication. One of these relates to the claimed right of the state Board to bring down to its diversion dam and there divert water previously stored by it on a tributary of the Missouri, and to the Board’s right, claimed under the provisions of the act creating it, to the return flow or seepage from previous use. Others relate to the propriety of the court’s having allowed the reservoir storage rights of appellee to be supplied from the normal flow of the stream rather than limiting the same to flood and waste waters as said to be provided by statute, and to questions relating to the adjustment or accommodation of rights as between irrigation and power users, it being asserted by the appellants that the decree unnecessarily gives to the Power Company a monopoly of the river. We mention these matters preliminarily since they disclose some of the serious questions of state practice and policy here involved.
At the outset, however, we are confronted with the problem of jurisdiction. The complaint presents no federal question. If, as contended, the State Water Conservation Board is the alter ego of the state of Montana in acquiring the water rights and in the erection and operation of the diversion works inspiring the suit, then it is plain that jurisdiction is not present. A state is not a citizen and, absent a federal question, the district courts are not possessed of jurisdiction of suits by or against a state. Postal Telegraph Cable Co. v. State of Alabama, 155 U.S. 482, 15 S.Ct. 192, 39 L.Ed. 231; Judicial Code § 24, as amended, 28 U.S.C.A. § 41(1).
The act creating the State Water Conservation Board was adopted in 1933 and has several times been amended or amplified. The legislation is found in Chapter 35 of the Political Code as embodied in the Revised Codes of Montana of 1935, §§ 349.1 to 349.38. The Governor and the state engineer are ex-officio members of the Board. The three remaining members, who are required to be qualified electors, are appointed by the Governor for terms of six years and are removable by him at any time. Like state officers generally, the appointive members are required to take, subscribe, and file with the Secretary of State the oath prescribed by the Constitution. The Governor is chairman of the Board, and the Attorney General is made its legal advisor. The compensation of the appointive members is payable from funds provided by legislative appropriation. § 349.3. No compensation, other than their regular salaries, is provided for the ex-officio members or for the Attorney General.
The object of the Act is stated in § 349.1 as follows: “It is hereby declared that the public interest, welfare, convenience and necessity require the construction of a system of works, in the manner hereinafter provided, for the conservation, development, storage, distribution and utilization of water. The construction of said system of works, is, and is hereby declared to be, a single object; and the construction, operation and maintenance of said system of works, as herein provided for, is hereby declared to be in all respects for the welfare and benefit of the people of the state, for the improvement of their prosperity and living conditions; and the state water conservation board hereinafter created shall be regarded as performing a governmental function in carrying out the provisions of this act.”
The act is responsive to what was felt by the Legislature to be “a state-wide need” for a comprehensive program of water conservation. § 349.5. To the extent neces*1000sary to carry out its provisions, “the board shall have full control of all the water of the state not under the exclusive control of the United States and not vested in private ownership, and it shall be its duty to take such steps as may be necessary to apr propriate and conserve the same for the use of the people.” § 349.15. In acquiring rights and in ■ administering the act, the Board is not limited' to the terms of the statutes relating to water rights theretofore enacted, “but, in addition thereto, may initiate a right to the waters of this state by executing a- declaration in writing of the intention to store, divert or control the unappropriated waters of a particular body, stream or source, * * *.” § 349.18.
Section 349.22 bestows upon the Board broad administrative powers in respect of the control and division of the natural flow of streams, and provides that when exercising the authority given it the Board “shall be deemed to be exercising a police power of the state of Montana.” It is declared in § 349.23 that the Board “shall be a body corporate and politic with perpetual existence, and as such, it shall be deemed to be an agency of the state of Montana.” By § 349.10 and § 349.13 direct legislative appropriations were made both for the administration fund and for a conservation revolving fund. In addition, all moneys paid or repaid the Board are, with certain exceptions, re-appropriated to the Board. Laws of Montana 1937, pp. 688-690.1
The Board is authorized to issue “water conservation revenue bonds of the state” for the purpose of paying the cost of public works and projects, but these bonds “shall not constitute or be a debt, liability or obligation of the state," and shall be secured only by revenues from operation and by funds from the sale of water or disposition of the works and facilities acquired. § 349.6. Title to property purchased or condemned is to be taken in the name of the Board. § 349.4. The Board may sue and be sued, § 349.3, and the statute authorizes it to sue in the state or federal courts for the purpose of acquiring and holding title to property for dam sites, etc., and it may prosecute actions for the adjudication of water rights on any stream. § 349.15. The Board is further authorized to exercise its powers in any adjoining state or country, subject to the laws thereof or of the United States. § 349.5.
The act has been construed by the Montana court in State ex rel. Normile v. Cooney, 100 Mont. 391, 47 P.2d 637. The complainant in that proceeding sought to enjoin the Board from constructing an irrigation and flood control project under the terms of a loan-grant agreement with the United States, it being asserted that the enabling statute violates provisions of the State Constitution. In refuting th^ objection that the act delegates legislative powers, the court said that “the water conservation board does not make the law, but in the execution of it as a public agency and as the agency of the lawmaking department, it is for the board to ascertain and declare the event upon which the expressed will of the Legislature, is to take effect.” (100 Mont, at page 404, 47 P.2d at page 644.) Again at page 408 of 100 Mont., 47 P.2d at page 646, of opinion, the court said: “The purpose of the [legislative] appropriations above. ref erred to is for a public use. The water conservation board is created by law. It is an agency of the state. It is under the control of the state * * * "2
The terms of the statute and the holding in the Cooney case leave little room for doubt that the Board is a mere arm of the sovereign.3 Its members are state of*1001ficers. The duties they perform might appropriately have been delegated solely to existing constitutional officers and performed directly in the name of the state. While appellee insists that the rights, property and funds held by the Board are not owned by the state, the actuality of state ownership would become immediately evident if the Legislature were to abolish its agency. Cf. Wilson v. State Water Supply Commission, 84 N.J.Eq. 150, 93 A. 732. In view of the scope of modern governmental activities it would be impertinent to inquire, as appellee would have us do, whether the federal courts may disregard the legislative declaration to the effect that the functions of the Board are governmental. Certainly the conservation and development of its public waters is an enterprise of fundamental concern to an arid state like Montana, where recurring droughts point the urgent need for such a program. A somewhat similar program for the development and utilization of water in the arid regions of the United States has long been regarded by Congress as an appropriate subject for governmental attention, as witness the creation and expansion of the activities of the United States Reclamation Service, 43 U.S.C.A. § 371 et seq.
Appellee likens the Board to an irrigation district and cites Montana cases holding that such boards are distinct entities, performing private and proprietary functions, Thaanum v. Bynum Irr. Dist., 72 Mont. 221, 232 P. 528; Buffalo Rapids Irr. Dist. v. Colleran, 85 Mont. 466, 279 P. 369. In the case last cited the court, observed (85 Mont. at page 479, 279 P. at page 373) that such districts “are not created with a view to benefit the state * * * but in order to promote the material prosperity of the few owning property within their boundaries.” We see no reason for assimilating such local quasi-public corporations with a state agency of the character of appellant.
The precedents support the view that the state is the real party in interest. In Kansas City Bridge Co. v. Alabama State Bridge Corp., 5 Cir., 59 F.2d 48, 50, a diversity case, it was held that the suit was in substance against the state although prosecuted against a legislatively created corporation authorized by statute to sue and be sued. The corporation had been set up for the purpose of erecting toll bridges which were, on recoupment of their cost, ultimately to be made free for the use of the public. It was thought that this function was one which the state might perform either in its own name or through its public officers or one of its governmental agencies, the court saying that “in the nature of things the state had to choose some such agency in order to effectuate its purpose.”
The case of State Highway Commission of Wyoming v. Utah Const. Co., 278 U.S. 194, 49 S.Ct. 104, 106, 73 L.Ed. 262, involved a suit against a state agency on a road construction contract. Originally the Commission had been empowered to sue and be sued in its own name in any court upon any contract executed b- it. Tirs provision was amended after the institution of the particular action so as to limit suits against the Commission to those brought in the local tribunals. Said the court: “It is unnecessary for us to consider the effect of the general grant of power to sue or be sued to the highway commission or its withdrawal in 1927- — this suit, in effect, is against the state and must be so treated. No consent by the state to submit itself to suit could affect the question of diverse citizenship.” Since no ground of jurisdiction was asserted other than that of diversity of citizenship, it was held that the suit could not be maintained.
In Fowler v. California Toll-Bridge Authority, 9 Cir., 128 F.2d 549, we affirmed the decision of the lower court holding that it was without jurisdiction to entertain a suit brought by a citizen of -Louisiana against the California Toll-Bridge Authority, a state agency authorized by statute to sue and be sued in its own name. The nature and functions of the Authority are sufficiently described in that opinion and we need not stop to analyze them again. Somewhat in the same way as here, bonds of the Authority were authorized to be issued, secured wholly by a lien upon the tolls and other revenue obtained from the operation of the particular toll bridge acquired or constructed. These bonds, like those issued by the Montana Board, were not obligations of the state. Consult further on the general subject State Highway Commission v. Kansas City Bridge Co., 8 Cir., 81 F.2d 689; Suncrest Lumber Co. v. North Carolina Park Comm., 4 Cir., 29 F.2d 823.3a
*1002It is argued that even if the members of the Board are state officers the suit is maintainable in the federal courts, because, it is said, the Board acted in excess of -its statutory authority. The nubbin of the argument appears to be that the legislative act recognizes vested rights of prior appropriators, and that the Board invaded appellee’s rights merely by making an appropriation of water and by taking steps looking toward the erection of a diversion dam. However, the act specifically authorizes the making of appropriations and the construction of works. There was no presumption at the outset that in pursuing the program outlined for it by the legislature the Board would violate prior rights.4 The injunctive relief sought was supplemental to the main purpose of the action, which was to quiet appellee’s title to the waters of the river. This suit is not typical of those relied on by appellee where the relief asked for was injunction against the commission by state officials of specific wrongful acts.5 In any event the act itself afforded appellee an adequate remedy for any actual invasion of its rights. Section 349.22 thereof provides that “the owner of any prior right contending that the board is not recognizing and respecting such appropriation may resort to a court of equity for the purpose of determining whether or not the rights of said claimant have been invaded and the board shall observe the terms of such final decree.”
The judgment is reversed and the cause remanded with directions to dismiss as against the State Water Conservation Board and its members.
In 1939 the legislative appropriations to the Board for the ensuing biennium, amounting to $880,000, were made out of moneys in the general fund in the state treasury not otherwise appropriated. Laws of Montana 1939, pp. 675, 076.
In the course of its decision the court said that the property acquired by the Board is owned by the state, and on the same page of the opinion observed that ownership thereof is in the Board. These'utterances, seeming on superficial reading to he contradictory, are indicative, rather, of the court’s thought that the Board and the state are indistinguishable.
Appellees call attention to Geboski v. Montana Armory Board, 110 Mont. 487, 103 P.2d 679, 682, in which case an armory board, created by the Legislature, was described as “a public corporation separate and apart from the state.” The armory board was authorized by the statute to erect armories and to lease them to the state, or to donate them to the state after they were fully paid for. We see nothing of value to be gleaned from the decision.
We think the decision in Port of Seattle v. Oregon & W. R. Co., 255 U.S. 56, 41 S.Ct. 237, 238, 65 L.Ed. 500, is not in point. The Port was a local body, *1002described by the court as a municipal corporation exercising, among others, “powers similar to those exercised by counties.”
That appellee’s rights were not per se invaded by the enterprise in question is shown by the fact that the Board’s project was completed during the course of the trial and water was diverted from the river during the 1941 irrigation season, concededly without interfering with appellee’s prior rights. Indeed it was found that with the exception of the months of July and August the flow of the Missouri has normally been more than sufficient to supply appellee’s requirements.
The authorities cited by appellee are: Weiland v. Pioneer Irr. Co., 8 Cir., 238 F. 519, affirmed 259 U.S. 498, 42 S.Ct. 568, 66 L.Ed. 1027; Magruder v. Belle Fourche Valley Water Users’ Ass’n, 8 Cir., 219 F. 72; Mitchell Irr.Dist. v. Sharp, 10 Cir., 121 F.2d 964; Tyler v. Stanolind Oil & Gas Co., 5 Cir., 77 F.2d 802, certiorari denied Allred v. Stanolind Oil & Gas Co., 296 U.S. 627, 56 S.Ct. 149, 80 L.Ed. 445; Id., 296 U.S. 663, 56 S.Ct. 169, SO L.Ed. 472; Tindal v. Wesley, 167 U.S. 204, 17 S.Ct. 770, 42 L.Ed. 137; Hopkins v. Clemson Agricultural College, 221 U.S. 636, 31 S.Ct. 654, 55 L.Ed. 890, 35 L.R.A.,N.S., 243; Lane v. Watts, 234 U.S. 525, 34 S.Ct. 965, 58 L.Ed. 1440; Payne v. Central Pac. R. Co., 255 U.S. 228, 41 S.Ct. 314, 65 L.Ed. 598.