United States Court of Appeals
For the First Circuit
No. 01-2124
UNITED STATES OF AMERICA,
Plaintiff, Appellee,
v.
COMMONWEALTH OF PUERTO RICO ET AL.,
Defendants, Appellants.
APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF PUERTO RICO
[Hon. Héctor M. Laffitte, U.S. District Judge]
Before
Torruella, Circuit Judge,
Coffin, Senior Circuit Judge,
and Selya, Circuit Judge.
Roberto J. Sánchez-Ramos, Solicitor General, and Salvador
J. Antonetti-Stutts, Director, Federal Litigation Division,
Puerto Rico Department of Justice, with whom Vanessa Lugo-
Flores, Deputy Solicitor General, Daniel Riesel, Elizabeth
Read, and Sive, Paget & Riesel, were on brief, for appellants.
Katherine J. Barton, Attorney, Environment & Natural
Resources Division, United States Department of Justice, with
whom John C. Cruden, Acting Assistant Attorney General, William
B. Lazarus, Attorney, Environment & Natural Resources Division,
Guillermo Gil, United States Attorney, Isabel Muñoz Acosta,
Assistant United States Attorney, and John Tew, Office of
General Counsel, United States Department of the Navy, were on
brief, for appellee.
April 24, 2002
SELYA, Circuit Judge. In 1952, Congress enacted the
McCarran Amendment, 43 U.S.C. § 666, a law that waived the
sovereign immunity of the United States in suits for the general
adjudication or administration of water rights. This appeal
turns on the scope of that waiver.
The underlying litigation flows from Puerto Rico's
efforts to impose restrictions on the extraction of water from
a river known as the Rio Blanco. The Commonwealth asserts that
the McCarran Amendment divests the United States of its
sovereign immunity in respect to the compelled participation of
the United States Navy in administrative proceedings concerning
that subject, commenced pursuant to Puerto Rico's Law of Waters,
12 P.R. Laws Ann. §§ 1501-3015. Disagreeing with this
assertion, the Navy asked the United States District Court for
the District of Puerto Rico for surcease. The district court
stayed the administrative proceedings pending final resolution
of the suit. In due course, the court found the McCarran
Amendment inapplicable and granted the Navy sanctuary. See
United States v. Puerto Rico, 144 F. Supp. 2d 46, 53 (D.P.R.
2001).
Although our reasoning differs significantly from the
district court's, we too hold that the McCarran Amendment does
not waive the sovereign immunity of the United States with
-3-
respect to the administrative proceedings here at issue. The
McCarran Amendment speaks of "suits," and the local proceedings,
instituted by the Commonwealth's Department of Natural and
Environmental Resources (DNER) under the Law of Waters, cannot
be so characterized.
I. BACKGROUND
Insofar as pertinent here, the facts are
uncontroversial. During World War II, the Navy began
construction of the United States Naval Station at Roosevelt
Roads (NSRR). To ensure an adequate fresh-water supply, the
Navy obtained a permit (the 1942 permit) from the Puerto Rico
Public Service Commission to withdraw up to ten cubic feet per
second from the Rio Blanco. The Navy then proceeded to
construct a primary water intake in the tailrace of a privately-
owned hydroelectric power plant and an emergency intake just
upstream of the plant. Shortly thereafter, a federal agency
acquired title to the hydroelectric plant and conveyed it to the
Puerto Rico Water Resources Authority (PRWRA). In consideration
of the conveyance, the PRWRA issued a permit (the 1944 permit)
granting the federal government the right "to continue the use,
-4-
operation, and maintenance" of the water supply system free of
charge for as long as the NSRR remained operational.1
Puerto Rico enacted the Law of Waters in 1976. The
statute directs the Secretary of the DNER to formulate an
integrated plan for conservation, development, and use of the
Commonwealth's water resources, 12 P.R. Laws Ann. § 1505(a), set
water consumption priorities, id. § 1505(e), and establish and
administer a system that allocates water based on those
priorities, id. § 1505(j). The statute contemplates the
issuance of permits for the drilling of water wells and the
granting of franchises for the utilization of surface waters.
Id. § 1509.
The statutory regime further provides that when a body
of water lacks sufficient volume to meet the demands that are
made upon it, the Secretary may institute a process to allocate
the available water among competing claimants. Id. § 1515. The
statute grants affected parties the right to a hearing before
the Secretary — a hearing that incorporates the right to
counsel, the right to present evidence, and similar procedural
protections. Id. § 1519. Although the statute terms such
1
The parties hotly debate whether the 1944 permit granted a
right to withdraw water or merely an easement-like right to
maintain the water supply system. We have no occasion to reach
this issue.
-5-
hearings "quasi-judicial," no court officer is involved; the
details of the process are spelled out in the DNER's
regulations, and the Secretary's decision is final unless an
aggrieved party seeks review within thirty days in a court of
first instance. Id. § 1520.
In 1986, the DNER, acting under the Law of Waters,
admonished the Navy that it needed to update its franchise for
diverting water from the Rio Blanco. Thinking this a mere
formality, the Navy submitted a renewal application. The
Secretary never acted upon the application, claiming that it was
incomplete.
The matter remained on the back burner until July 7,
1999, when the DNER served the Navy with a "cease-and-show-
cause" order. This order rested on the premise that the Navy
was withdrawing water from the Rio Blanco without a valid
franchise (and thereby transgressing the Law of Waters). After
some intermittent contacts, marked chiefly by bureaucratic
wrangling, the Secretary issued a second order, dated October
29, 1999, directing the Navy to (1) initiate a franchise request
for the primary and emergency water intake locations, (2)
install metering devices to measure water extraction from both
intakes, (3) reimburse the Commonwealth for prior water
consumption, and (4) pay provisional user fees until its water
-6-
rights claims were administratively determined. This order
informed the Navy, in no uncertain terms, that it was obliged to
participate in franchise application proceedings, and that the
DNER might ultimately grant or deny a franchise, taking into
account "the needs of the entire community of the area."
Dismayed by the DNER's dismissive attitude toward its
rights under the 1942 and 1944 permits, the Navy sued the
Commonwealth and the Secretary. Its complaint asked the federal
district court both to enjoin the defendants from enforcing the
DNER's orders, and to confirm the Navy's right to withdraw water
from the Rio Blanco as provided in the 1942 and 1944 permits.
The Navy advanced a golconda of arguments in support of these
prayers for relief, alleging, inter alia, that the 1944 permit
bestowed an affirmative right to withdraw water from the Rio
Blanco free of charge, and that the Secretary's efforts to
plunge the Navy into administrative water use proceedings
infringed the sovereign immunity of the United States. The
defendants took a much dimmer view of the combined force and
effect of the Navy's permits. In addition, they maintained that
the ongoing DNER proceedings fell within the waiver of sovereign
immunity effected by the McCarran Amendment.
On November 22, 1999, the district court enjoined all
DNER proceedings against the Navy pendente lite. The defendants
-7-
then moved to dismiss the action. Pertinently, they posited
that the waiver contained in the McCarran Amendment extended to
administrative proceedings of the type and kind initiated by the
Secretary under the Law of Waters. The Navy opposed the motion.
In regard to the sovereign immunity issue, it advanced several
reasons why the McCarran Amendment did not pave the way for the
DNER proceeding. Among other things, the Navy asseverated that
the proceeding was not a general stream-wide adjudication of the
sort envisioned by the McCarran Amendment, but, rather, a purely
administrative proceeding limited to a single user.
In response, the defendants reiterated their argument
that the administrative proceedings were covered by the McCarran
Amendment. They suggested that the particular administrative
proceeding they had initiated was merely the first in a series
of proceedings which, in due course, would involve other water
rights claimants. To emphasize this last point, the defendants
moved on January 31, 2001, for a limited modification of the
stay in order to permit them to join other parties in the
ongoing administrative proceeding and carry out a general
stream-wide allocation referable to the Rio Blanco.
The district court denied both motions on March 30,
2001, and set the case for trial. On May 9, the court reversed
its field and advised the parties that it would address the
-8-
issues raised by the defendants' motion to dismiss in advance of
trial. Roughly four weeks later, the court issued an opinion
that not only denied the motion to dismiss but also declared
that federal sovereign immunity barred the Secretary from
compelling the Navy to participate in the ongoing administrative
proceeding.2 The court based this conclusion on the fact that
the Navy's water rights antedated the McCarran Amendment. See
United States v. Puerto Rico, 144 F. Supp. 2d at 52-53. This
appeal followed.
II. DISCUSSION
Although a plethora of other interesting questions lurk
in the penumbra of this case, we deem the sovereign immunity
issue dispositive. Consequently, we start by describing the
legal framework applicable to that issue, explain briefly why we
reject the district court's rationale, and then proceed to the
merits. Since the existence vel non of sovereign immunity here
2
Because the United States, to this point, had not moved
affirmatively for remedial action, the court's ruling was, in
effect, a sua sponte grant of declaratory and injunctive relief.
We need not probe this seeming anomaly, however, as the
defendants have not made a developed argument that we should
vacate the order on the ground of procedural irregularity, see
United States v. Zannino, 895 F.2d 1, 17 (1st Cir. 1990) (noting
that "issues . . . unaccompanied by some effort at developed
argumentation are deemed waived"), but, rather, have elected to
attack the district court's ruling head-on.
-9-
depends upon a question of waiver, and that question in turn
depends on statutory construction, we afford plenary review.
Strickland v. Comm'r, Me. Dep't of Human Servs., 96 F.3d 542,
545 (1st Cir. 1996).
A. The Legal Framework.
It is common ground that absent waiver or consent,
federal sovereign immunity precludes a state from hauling the
United States into either a state court or an adversarial state
administrative proceeding. But Congress can waive federal
sovereign immunity, and the McCarran Amendment — the sole
"waiver" statute that is at issue here — constitutes an express
waiver of that immunity in suits for the adjudication of water
rights. It provides in pertinent part:
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, when a party to any such suit, shall
(1) be deemed to have waived any right to
plead that the State laws are inapplicable
or that the United States is not amenable
thereto by reason of its sovereignty, and
(2) shall be subject to the judgments,
orders, and decrees of the court having
jurisdiction, and may obtain review thereof,
in the same manner and to the same extent as
-10-
a private individual under like
circumstances: Provided, That no judgment
for costs shall be entered against the
United States in any such suit.
43 U.S.C. § 666(a).
Typically, waivers of federal sovereign immunity are
strictly construed. E.g., United States v. Horn, 29 F.3d 754,
762 (1st Cir. 1994). In United States v. Idaho, 50 8 U . S . 1
(1993), the Supreme Court confirmed that this interpretive
approach applies in the context of the McCarran Amendment. The
Court stated:
Any such waiver must be strictly construed
in favor of the United States, and not
enlarged beyond what the language of the
statute requires. But just as we should not
take it upon ourselves to extend the waiver
beyond that which Congress intended[,] . . .
[n]either, however, should we assume the
authority to narrow the waiver that Congress
intended.
Id. at 6 (citations and internal quotation marks omitted).
The short of it is that congressional intent remains
the key determinant of the scope of a waiver of federal
sovereign immunity — and the McCarran Amendment is no exception
to this rule. To discern what Congress intended, we look
primarily to the language and structure of the statute. See
United States v. Hilario, 218 F.3d 19, 23 (1st Cir. 2000).
Plain meaning controls except when the statutory text is
ambiguous, or when literal application of the words would either
-11-
contravene clear legislative intent or lead to an absurd result.
Id.
B. The District Court's Rationale.
The district court held the McCarran Amendment waiver
inapplicable on non-retroactivity grounds. United States v.
Puerto Rico, 144 F. Supp. 2d at 52-53. We agree with the
defendants that this reasoning misses the mark.3
There is, of course, a general presumption against
applying statutes retroactively. See Landgraf v. U.S.I. Film
Prods., 511 U.S. 244, 280 (1994). This presumption, combined
with the rule of strict construction for waivers of federal
sovereign immunity, can suffice to ground a plausible argument
that the McCarran Amendment was not intended to have retroactive
application. The rub, however, is that the case before us does
not involve a backward-looking application of the statute.
The McCarran Amendment was adopted in 1952, and the
DNER proceeding against the Navy did not commence until 1999.
A law is not considered retroactive merely because events
occurring prior to its passage are implicated in subsequent
proceedings under it. See Campbell v. United States, 809 F.2d
563, 571 (9th Cir. 1987); Alexander v. Robinson, 756 F.2d 1153,
3
The United States, to its credit, concedes this point
(although it vigorously defends the district court's decision on
alternate grounds).
-12-
1155 n.5 (5th Cir. 1985). Thus, the fact that the United States
traces its water rights to permits issued in the early 1940s
does not alter the conclusion that the use to which the
defendants seek to put the statutory waiver would be a
prospective application, not a retrospective one. Because the
defense of sovereign immunity exists wholly apart from any legal
rights that the Navy might claim under the 1942 and 1944
permits, see United States v. Dist. Ct. ex rel. Eagle County,
401 U.S. 520, 525-26 (1971), the incidence of federal sovereign
immunity cannot turn on the date a particular right was
acquired. See Campbell, 809 F.2d at 571 (explaining that "the
presumption against 'retroactivity' has generally been applied
only when application of the new law would affect rights or
obligations existing prior to the change in law"). Hence, the
McCarran Amendment applies to water rights acquired prior to
1952, as long as the suit against the government is commenced
subsequent to that date. See, e.g., Eagle County, 401 U.S. at
523 (finding the McCarran Amendment applicable even though the
underlying federal rights were acquired in 1905).
C. The Merits.
Despite the fact that we do not accept the district
court's ratio decidendi, we nonetheless may affirm the judgment
on any independent ground that is apparent in the record. See,
-13-
e.g., Lohnes v. Level 3 Communications, Inc., 272 F.3d 49, 52
(1st Cir. 2001). The Navy argues that the waiver embodied in
the McCarran Amendment does not extend to purely administrative
proceedings (such as the proceeding that the Secretary
commenced). We turn next to that argument.4
In crafting the McCarran Amendment, Congress
consistently used the word "suit" to describe the matters
affected by the statutory waiver of federal sovereign immunity.
That word appears no fewer than seven times in a relatively
compact statute (most of which is reproduced above). The word
"suit" has a particularized meaning in legal parlance; it refers
specifically to an action in a judicial forum. See Black's Law
Dictionary 1448 (7th ed. 1999) (defining a "suit" as "[a]ny
proceeding by a party or parties against another in a court of
law") (emphasis supplied). The term's meaning was essentially
the same a half-century ago (when Congress enacted the McCarran
Amendment). E.g., Stoll v. Hawkeye Cas. Co., 185 F.2d 96, 98
(8th Cir. 1950) (stating that the generally accepted definition
of the word "suit" refers to a "proceeding in a court of
justice") (quoting Weston v. City Council of Charleston, 27 U.S.
4Because we find this argument compelling, we need not
evaluate the Navy's asseveration that the McCarran Amendment
does not apply because the DNER proceeding is neither a general
stream-wide adjudication nor an "adjudication of rights" within
the contemplation of the statute.
-14-
(2 Pet.) 449, 464 (1829) (emphasis supplied)). The presumption
is that Congress knew, and purposefully embraced, that
particularized meaning when it chose to employ the word in the
text of the McCarran Amendment. See Morissette v. United
States, 342 U.S. 246, 263 (1952); United States v. Nason, 269
F.3d 10, 16 (1st Cir. 2001).
Nothing in the language or structure of the McCarran
Amendment rebuts this presumption.5 To the contrary, Congress's
persistent use of terms such as "defendant," "necessary party,"
and "the court having jurisdiction," virtually compels the
conclusion that the repeated references to suits were fully
calculated. It follows that the waiver was meant to apply only
to judicial proceedings.
The defendants attempt to blunt the force of Congress's
seven-fold resort to the word "suit" in the text of the McCarran
Amendment by reliance on the Ninth Circuit's opinion in United
States v. Oregon, 44 F.3d 758 (9th Cir. 1994). They cite this
case for the proposition that "suit," as that word is used in
the McCarran Amendment, encompasses administrative as well as
judicial proceedings. Whether or not Oregon is correctly
5
To be sure, the McCarran Amendment does contain a reference
to the "administration of [water use] rights," but read in
context, these words grammatically refer to suits for the
administration of such rights, and so fail to broaden the scope
of the waiver.
-15-
decided — a matter on which we take no view — we do not believe
that the opinion supports so sweeping a proposition.
In Oregon, the Ninth Circuit held that a unitary water
rights adjudication framework, which contained both
administrative and judicial components, satisfied the McCarran
Amendment's definition of a suit. Id. at 767. The court noted
that the primary purpose of the McCarran Amendment was to permit
comprehensive water rights adjudications in the arid
southwestern states (where, historically, the United States held
a major portion of such rights). See id. at 765. Most of those
states adopted specific statutory schemes for water rights
adjudications, and those schemes tended to delegate significant
authority to administrative agencies. See id. at 763-65. The
court reasoned that to exclude such proceedings from the scope
of the waiver granted by the McCarran Amendment would defeat the
drafters' intent to facilitate water use adjudications in those
regions. See id. at 765-67; see also Colo. River Water Conserv.
Dist. v. United States, 424 U.S. 800, 819 (1976) ("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.").
-16-
The statutory scheme considered in Oregon was a unitary
scheme that contained two interconnecting tracks. Although it
envisioned that an action would be commenced administratively by
the agency (the Oregon Water Resources Department), that action
automatically would proceed to a judicial forum upon completion
of the administrative process. See Oregon, 44 F.3d at 764. In
other words, the Oregon statute constructs a seamless
proceeding, possessing both administrative and judicial
components. These two components "are not independent or
unrelated, but parts of a single statutory proceeding, the
earlier stages of which are before the [agency] and the later
stages before the court." Pacific Live Stock Co. v. Or. Water
Bd., 241 U.S. 440, 451 (1915) (commenting upon Oregon's
statutory scheme for the administration of water rights). In
other words, the agency "merely paves the way for an
adjudication by the court of all the rights involved." Id.
Thus, even though the word "suit" contemplates an action in a
judicial forum, it is at least arguable that this seamless
proceeding constitutes a suit.
Puerto Rico's approach differs in material respects
from Oregon's. The Law of Waters does not establish a seamless
process with both administrative and judicial components.
Rather, it contemplates a purely administrative proceeding — a
-17-
proceeding that ordinarily will terminate with a final order of
the Secretary. It defies common sense to say that this type of
administrative proceeding, wholly lacking any integrated
judicial involvement, is a fair congener to a proceeding under
the Oregon scheme (and, thus, constitutes a suit).
To plug this hole, the defendants respond that a
proceeding under the Law of Waters leaves open the possibility
of judicial review. See 12 P.R. Laws Ann. § 1520 (conferring
upon any aggrieved party a right to seek judicial review of the
DNER's final order within thirty days). Their premise is true,
but their suggested conclusion — that this right of judicial
review transmogrifies the underlying proceeding into a suit —
does not hold water. We explain briefly.
Section 1520 is a bareboned provision, which lacks any
semblance of detail. Therefore, we must assume that it merely
acknowledges the right of judicial review embodied in Puerto
Rico's Uniform Administrative Procedure Act (UAPA), 3 P.R. Laws
Ann. §§ 2101-2201.6 Cf. Becker v. FEC, 230 F.3d 381, 384 (1st
Cir. 2000) (reasoning that because a federal statute contained
no provisions governing the mode and manner of judicial review,
6Under the UAPA, "[a]ny party which is adversely affected by
a final order or resolution of an agency" has thirty days within
which to file a petition for review in a local court. 3 P.R.
Laws Ann. § 2172.
-18-
the provisions set forth in the APA applied). That review is
highly circumscribed and cannot serve to compensate for the
absence of meaningful judicial involvement in the underlying
proceeding. After all, virtually every final agency action is
reviewable by a court of law. See, e.g., Administrative
Procedure Act (APA) § 704, 5 U.S.C. § 704 ("Agency action made
reviewable by statute and final agency action for which there is
no other adequate remedy in a court are subject to judicial
review."). To accept that the right to a limited APA-type of
judicial review suffices to convert a purely administrative
proceeding into a suit would compel the absurd conclusion that
all administrative proceedings are suits and that no purely
administrative proceedings exist. We cannot endorse so radical
a proposition.
A further comparison between Oregon's seamless scheme
for the adjudication of water rights and Puerto Rico's Law of
Waters illustrates the point. Under the former scheme, a
reviewing court is not constrained by the administrative record
but may receive additional evidence, Warner Valley Stock Co. v.
Lynch, 336 P.2d 884, 901 (Or. 1959), or, alternatively, may
appoint a special master to take further testimony, Or. Rev.
Stat. § 539.150. Relatedly, such a scheme allows de novo
-19-
judicial review of factual matters. See Warner Valley, 336 P.2d
at 900.
The UAPA (and, thus, Puerto Rico's Law of Waters)
operates quite differently. Under it, an inquiring court is
limited to the administrative record, and the agency's
factfinding "shall be upheld by the court [so long as] grounded
on substantial evidence filed in the administrative record." 3
P.R. Laws Ann. § 2175. Thus, a court examining a decision of
the Secretary in a case under the Law of Waters would be forced
to rely solely on evidence presented in the administrative
proceeding, and would have to defer broadly to the Secretary's
findings of fact. Limitations such as these underscore that
Puerto Rico's water rights proceedings are both procedurally and
substantively different from a traditional suit. In effect, an
agency functions under the UAPA scheme as an independent
adjudicator within the executive branch of government, whereas,
under a seamless scheme possessing both administrative and
judicial components, an agency functions as an aid to the court.
In sum, a seamless administrative-judicial scheme (such
as Oregon's) places the court in the role of independent
adjudicator, not merely in the role of reviewer of a pre-
compiled record. Based on this salient distinction, we hold
that even if Oregon's scheme might be termed a suit, Puerto
-20-
Rico's counterpart scheme cannot be so characterized. Put
another way, because a DNER proceeding under the Law of Waters
contains no significant judicial component, it is not equivalent
to a suit — and the balm of the McCarran Amendment does not
extend to it.
We need go no further. There is simply no persuasive
evidence that the repeated use of the word "suit" by the
drafters of the McCarran Amendment was either a linguistic
accident or an awkward attempt to convey a meaning different
than the norm.7 Thus, we are bound to accord the word "suit" its
ordinary meaning. See Morissette, 342 U.S. at 263; Nason, 268
F.3d at 16. So defined, the word presupposes a meaningful
adjudication in a judicial forum. Since the Law of Waters does
not provide for such an adjudication, the McCarran Amendment
does not apply here. It follows inexorably that federal
sovereign immunity bars the proceeding that the Secretary seeks
to launch against the Navy.
7
For what it may be worth, we note that nothing in the
legislative history of the McCarran Amendment establishes that
Congress intended the waiver of federal sovereign immunity to
cover a purely administrative scheme for the adjudication of
water rights. In the Senate hearings, the distinction between
administrative and judicial actions was drawn at several points,
see, e.g., Hearings on S.18, Subcomm. Sen. Jud'y Comm., 82d
Cong., 1st Sess., 10-11, 23, 53 (1952), but the hearings are
unilluminating as to the key issue of whether the Amendment was
ultimately intended to encompass purely administrative
proceedings.
-21-
III. CONCLUSION
To recapitulate, we hold that the McCarran Amendment
does not waive federal sovereign immunity with respect to the
purely administrative proceeding commenced against the Navy
under the Law of Waters. The upshot is that the federal
government's immunity remains intact and the Secretary lacks the
authority to compel the Navy either to participate in the
ongoing administrative proceeding or to enforce the October 29,
1999 order.8
Affirmed and remanded.
8
Because our reasoning differs from that of the lower court,
we remand the case for the entry of an amended decree consistent
with this opinion.
-22-