On September 12, 2012, the Arizona Supreme Court addressed another aspect of the ongoing Gila River and Little Colorado River General Stream adjudications. The adjudications are based on A.R.S. §§ 45-251-45-264, and a potential claimant is anyone who claims the right to use water from either of the river systems. The various claims have been joined in a mass litigation. This case is only one piece of a broader, decades-old dispute over some 96,000 claims for water from the two river systems. At issue in the litigation was the priority and extent of water rights for thousands of claimants in the two river systems.
The U.S. Congress’s Act of September 9, 1850 (“Organic Act”) created the New Mexico Territory, which included much of present-day Arizona. It also designated certain lands to be set aside in trust for future states created from the territory. The Organic Act specified that these lands, referred to as the State Trust Lands, were for the benefit of schools and public institutions. Arizona became the beneficiary of the State Trust Lands in 1853 when it received separate territorial status, but only later received the lands upon accepting the terms of the Arizona-New Mexico Enabling Act of June 10, 1910 (“Enabling Act”), which set forth Arizona’s path to statehood.
The Arizona Supreme Court was asked to review the superior court’s ruling that there was no implied reservation of federal water rights included in a grant of land to Arizona. In re Gen. Adjudication of All Rights to Use Water in the Gila River Sys. & Source, No. WC-11-0001-IR, 2012 WL 3966327, at ¶¶ 10-11 (Ariz. 2012). The Arizona Supreme Court evaluated two ways in which a federal reservation of water rights may have been implied in the grants of the State Trust Lands: withdrawal or reservation of the lands by the federal government for a federal purpose, or by the intention of Congress in making the grant. Id.
Arizona offered two main arguments in support of its position that the federal government had impliedly reserved water rights for the State Trust Lands: 1) the federal government reserved federal water rights for the land by withdrawing the lands from the public domain, id. at ¶ 22, and 2) the Enabling Act’s intended purpose was to benefit schools and public institutions, which required the State Trust Lands to have sufficient water rights to achieve that purpose. Id. at ¶¶ 37-38.
Addressing the State’s first argument, the Arizona Supreme Court noted that the United States Supreme Court had established the standard for the implied reservation of federal water rights: “when the Federal Government withdraws its land from the public domain and reserves it for a federal purpose, it impliedly reserves appurtenant water to the extent needed to accomplish the purpose of the reservation.” Id. at ¶ 20 (internal citations omitted). Relying heavily on the reasoning in litigation over water rights in New Mexico flowing from the Organic and Enabling Acts, id. at ¶ 23, the Arizona Supreme Court determined that the lands had not been withdrawn by the Federal Government because the specific lands held in trust were not surveyed or selected until after ownership had transferred to Arizona under the Enabling Act. Id. at ¶¶ 27-28. The Court further explained that the phrase “federal purpose” meant that the land reservation had to be used for a federal reason. Id. at ¶ 29. Although Congress had indicated that the State Trust Lands were to be used for the benefit of schools and other public institutions, the Arizona Supreme Court held that this use was for the public benefit, and not for federal purposes. Id. at ¶¶ 30-31.
Finally, the Arizona Supreme Court disagreed with Arizona’s assertion that the reservation of water rights was necessary to achieve the purpose of the Enabling Act. The Court found, contrary to the State’s position, that the actual purpose of the Enabling Act was to increase the population in the Arizona Territory with the goal of achieving statehood—a goal better reached with freely available water use, not water reserved for the State Trust Lands. Id. at ¶ 38.