In re the Beneficial Water Use Permit Nos. 66459-76L, Ciotti 64988-g76L, Starner

JUSTICE LEAPHART,

specially concurring.

I concur in the result reached by the Court. However, while the Court has concluded that the applicants have failed to satisfy the Montana Water Use Act, specifically, § 85-2-311, MCA, I would hold that under the principles of tribal sovereignty, the state has no *65jurisdiction to issue water permits on the Flathead Reservation. Montana has no jurisdiction and no regulatory authority over tribal waters until tribal sovereignty has been waived pursuant to the McCarran Amendment, 43 U.S.C. § 666. In the absence of state jurisdiction to regulate or administer tribal water, compliance with the Water Use Act is immaterial.

In the administrative hearing on the Tribes’ motion to dismiss for lack of jurisdiction before the Department of Natural Resources and Conservation (DNRC), the Tribes initially argued lack of state jurisdiction based, in part, on the McCarran Amendment. In appealing DNRC’s final order and simultaneously filing a complaint for relief in the United States District Court for the District of Montana, the Tribes reserved the federal questions, including the jurisdictional issue raised by the McCarran Amendment, for the federal court1. For purposes of “informing” this Court, the Tribes set forth the McCarran Amendment jurisdictional issue as follows:

The reach of the McCarran Amendment’s waiver of sovereign immunity, however, extends only to state processes involving a general stream adjudication. See Dugan v. Rank, 372 U.S. 609, [83 S.Ct. 999, 10 L.Ed.2d 15] (1963). Obviously the present procedure, by which the DNRC proposes administratively to grant individual new water rights on a case-by-case basis does not fall within the McCarran Amendment’s waiver.

*66Having raised the specter of lack of state regulatory jurisdiction, the Tribes nonetheless contend that the jurisdictional issue has been reserved for resolution in the federal district court and that the only issue before this Court is the interpretation of Montana statutes. The Tribes, however, cannot run with the hare and hold with the hounds on the question of jurisdiction. John Lyly, Euphus (1579). Regardless of whether the parties seek to have us resolve the question of jurisdiction, we must do so. In re Marriage of Miller (1993), 259 Mont. 424, 426-27, 856 P.2d 1378, 1380. We cannot address the question of whether the applicants can comply with the requirements of the Water Use Act without making a threshold determination that the state had jurisdiction to apply the Water Use Act to the tribal waters in the first instance.

Indian reserved water rights are creatures of federal law and as such their existence and application are independent of state laws. Winters v. United States (1908), 207 U.S. 564, 28 S.Ct. 207, 52 L.Ed. 340. By virtue of their federal origin, Indian reserved water rights preempt any rights determined by state forums. Water use on a federal or Indian reservation is not subject to state regulation absent explicit federal recognition of state authority to do so. Federal Power Commission v. Oregon (1955), 349 U.S. 435, 75 S.Ct. 832, 99 L.Ed. 1215; Colville Confederated Tribes v. Walton (9th Cir. 1981), 647 F.2d 42, 52, cert, denied 454 U.S. 1092, 102 S.Ct. 657, 70 L.Ed.2d 630. Such recognition of state authority can be found in the McCarran Amendment, enacted in 1952, which allows joinder of the United States in state court adjudications of water rights, and subsequently in the states’ administration of such water rights, in river systems where the government owns rights. 43 U.S.C. § 666. The McCarran Amendment provides that:

Consent is hereby given to join the United States as a defendant in any suit (1) for the adjudication of rights to the use of water of a river system or other source, or (2) for the administration of such rights, where it appears that the United States is the owner of or is in the process of acquiring water rights by appropriation under State law, by purchase, by exchange, or otherwise, and the United States is a necessary party to such suit. ...

The United States Supreme Court has concluded that the McCarran Amendment includes Indian reserved water rights, thus, the states have jurisdiction to adjudicate Indian water rights. Colorado River Water Conservation Dist. v. United States (1976), 424 U.S. 800, 809-10, 96 S.Ct. 1236, 1242, 47 L.Ed.2d 483, 493-94. The suit at issue *67in Colorado River was part of Colorado’s ongoing comprehensive water adjudication. The Court was persuaded by the policy evinced in the McCarran Amendment that piecemeal adjudication of water rights in a river system should be avoided. Colorado River, 424 U.S. at 819, 96 S.Ct. at 1247.

The consent to jurisdiction given by the McCarran Amendment bespeaks a policy that recognizes the availability of comprehensive state systems for adjudication of water rights as the means for achieving these goals.

Colorado River, 424 U.S. at 819, 96 S.Ct. at 1247.

In a sequel to Colorado River, the United States Supreme Court restated the important federal interest in allowing all water rights on a river system to be adjudicated in a single comprehensive state proceeding rather than piecemeal litigation. Arizona v. San Carlos Apache Tribe (1983), 463 U.S. 545, 551, 103 S.Ct. 3201, 3205, 77 L.Ed.2d 837, 846.

The McCarran Amendment, as interpreted in Colorado River, allows and encourages state courts to undertake the task of quantifying Indian water rights in the course of comprehensive water adjudications. Although adjudication of those rights in federal court instead might in the abstract be practical, and even wise, it will be neither practical nor wise as long as it creates the possibility of duplicative litigation, tension and controversy between the federal and state forums, hurried and pressured decisionmaking, and confusion over the disposition of property rights.

San Carlos Apache, 463 U.S. at 569, 103 S.Ct. at 3215 (emphasis added). However, the Court added a caveat to the state courts’ adjudication of Indian water rights.

[0]ur decision in no way changes the substantive law by which Indian rights in state water adjudications must be judged. State courts, as much as federal courts, have a solemn obligation to follow federal law. Moreover, any state-court decision alleged to abridge Indian water rights protected by federal law can expect to receive, if brought for review before this Court, a particularized and exacting scrutiny commensurate with the powerful federal interest in safeguarding those rights from state encroachment.

San Carlos Apache, 463 U.S. at 571, 103 S.Ct. a 3216. Thus, in these and other cases, federal and state courts have clearly established that states may join the United States and Indian tribes in comprehensive water rights adjudications that include all claimants along a river. See United States v. District Court in & for Water Div. No. 5 (1971), *68401 U.S. 527, 91 S.Ct. 1003, 28 L.Ed.2d 284; United States v. District Court for Eagle County (1971), 401 U.S. 520, 91 S.Ct. 998, 28 L.Ed.2d 278; Dugan v. Rank (1963), 372 U.S. 609, 83 S.Ct. 999, 10 L.Ed.2d 15; In re Snake River Basin Water System (Idaho 1988), 764 P.2d 78, cert, denied 490 U.S. 1005, 109 S.Ct. 1639, 104 L.Ed.2d 155 (1989); Elephant Butte Irrigation v. Regents of New Mexico (N.M. App. 1993), 849 P.2d 372, 375-80.

In Colville Confederated Tribes, the Ninth Circuit Court of Appeals addressed the question of when states may exert jurisdiction over water on an Indian reservation. Colville Confederated Tribes, 647 F.2d 42. The court held that state water laws are not controlling on an Indian reservation. Colville Confederated Tribes, 647 F.2d at 53. Especially applicable in the instant case, the court quoted United States v. McIntire (9th Cir. 1939), 101 F.2d 650, 654:

[T]he Montana statutes regarding water rights are not applicable, because Congress at no time has made such statutes controlling in the Reservation. In fact, the Montana enabling act specifically provided that Indian lands within the limits of the state, “shall remain under the absolute jurisdiction and control of the Congress of the United States.”

Colville Confederated Tribes, 647 F.2d at 53. The court also noted that it did not perceive the McCarran Amendment as expanding the state’s regulatory powers over water on a federal reservation.

Later, in United States v. Anderson, the Ninth Circuit revisited the issue of state authority to regulate water on Indian reservations. United States v. Anderson (9th Cir. 1984), 736 F.2d 1358. In Anderson, the court held that because the Indian reserved water rights in question had been quantified and were under the protection of a federal water master, the state of Washington could exercise its regulatory jurisdiction over the use of surplus, non-reserved Chamokane Basin waters by non-members on non-Indian fee lands within the Spokane Reservation. Anderson, 736 F.2d at 1366. Central to the Ninth Circuit’s decision was the fact that:

[T]he interest of the state in exercising its jurisdiction will not infringe on the tribal right to self-government nor impact on the Tribe’s economic welfare because those rights have been quantified and will be protected by the federal water master.

Anderson, 736 F.2d at 1366.

A year later, the Ninth Circuit restated the proposition that the McCarran Amendment waives immunity only after a general adjudication of stream water rights has been made. South Delta Water *69Agency v. United States (9th Cir. 1985), 767 F.2d 531, 541. Determining that a court cannot adjudicate the administration of water rights until it determines what those rights are, the court held that:

Because there has been no prior adjudication of relative general stream water rights in this case, there can be no suit “for the administration of such rights” within the meaning of the McCarran Amendment.

South Delta, 767 F.2d at 541. Consequently, as the Tribes argue, albeit equivocally, a general stream adjudication, under subsection (1), must precede administration of federal or Indian water rights under subsection (2) of the McCarran Amendment. South Delta, 767 F.2d at 541.

In the instant case, DNRC’s issuance of new water permits to non-Indians on the Flathead Reservation was not part of a general stream adjudication. See Dugan, 372 U.S. at 618, 83 S.Ct. at 1005. Thus, as the Tribes point out “the present procedure, by which the DNRC proposes administratively to grant individual new water rights on a case-by-case basis does not fall within the McCarran Amendment’s waiver.”

In passing the Indian and Federal Water Rights Act, §§ 85-2-701 through -705, MCA, the Montana Legislature recognized the unique status of Indian reserved water rights within the state adjudication system. The Act allows Montana Tribes and the Montana Reserved Water Rights Compact Commission to negotiate a resolution of Indian claims rather than enter into a full McCarran inter sese adjudication. The Tribes’ negotiations with the Montana Reserved Water Rights Compact Commission are ongoing and not yet complete. Accordingly, pursuant to § 85-2-217, MCA, “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.” Until the senior tribal water rights have been identified and quantified through negotiation or adjudication, excess or surplus waters that could subsequently be available for appropriation under the Water Use Act, are unidentifiable and unquantifiable. Thus, until the compact negotiations conclude, DNRC cannot, under the McCarran Amendment, administer water permits for those drainages that are affected by reserved Indian water rights.

Consequently, in the absence of a completed adjudication or negotiation of Indian water rights, the McCarran Amendment’s waiver of tribal sovereign immunity for the purposes of “administering” those rights is not triggered. Until there has been a quantification of tribal water rights, DNRC does not have jurisdiction under the McCarran *70Amendment to “administer” any excess waters through issuing permits — even if those permits are provisional and subject to future adjudication. See § 85-2-313, MCA.

Accordingly, I concur in the Court’s conclusion that DNRC cannot grant a permit to use water on the Flathead Reservation until the-Tribes’ water rights are first adjudicated and quantified. However, while the Court bases its decision on the applicants’ failure to satisfy the Water Use Act, § 85-2-311(l)(e), MCA, I conclude that the Montana Water Use Act does not come into play unless, pursuant to the jurisdictional prerequisites of the McCarran Amendment, the Tribes’ sovereignty is waived. That is, until there has been a completed adjudication or negotiation of Indian water rights, the state of Montana has no ability to quantify those rights and no jurisdiction to administer potentially surplus waters through the issuing of permits, provisional or otherwise.

. The federal district court granted the Tribes an England reservation thereby allowing the Tribes to litigate their state claims in state court and then return to federal court to litigate the question of whether they are constitutionally exempt from the Montana Water Use Act. England v. Louisiana State Bd. of Medical Examiners (1964), 375 U.S. 411, 84 S.Ct. 461, 11 L.Ed.2d 440. In affirming that reservation, the Ninth Circuit held that the intent of such an England reservation is to allow the federal court to await the state court litigation and then, if necessary, decide the federal claims "in light of the state court’s rulings." Confederated Salish v. Simonich (9th Cir. 1994), 29 F.3d 1398, 1406. The federal courts, however, have failed to reckon with the fact that the federal question (whether the tribes are constitutionally exempt from the Montana Water Use Act) presents a threshold question of jurisdiction; i.e., whether the state of Montana has any jurisdiction to apply its Water Use Act in the first instance. That fundamental question of state jurisdiction must be addressed first. The state courts cannot proceed to interpret the Water Use Act vis a vis the tribal rights unless it is first determined that the state of Montana has jurisdiction to apply the Act to tribal waters. Secondly, the state’s interpretation of the Water Use Act will shed no "light" on the resolution of the issue which has been reserved for federal court. That is, whether the tribes, through their sovereignty, are exempt from the Act. It is the state court which should be awaiting resolution of the jurisdictional question in federal court, not vice versa.