regard to the use of the surface of federal lands, permits have
been issued for grazing. The permits generally fall into two
classes, one governing the use of forest lands and the other
under the Taylor Grazing Acts, relating to the use of winter
range. Congress, in providing for the issuance of permits, has
expressly recited that the permittee has no vested right in the
land. The courts have uniformly held that when the lands are
needed for governmental purposes, the permits may be revoked and
the Government has no legal duty to compensate the permitee. See
United States v. Cox , 190 F.2d 293 (10th Cir.), cert, denied, 342
U.S. 867 (1951); Osborne v. U. S. , 145 F.2d 892 (9th Cir. 1944).
Still, when use of the lands became necessary for military
purposes. Congress expressly provided that:
Whenever use for war or national defense purposes of
the public domain. . .prevents its use for grazing, persons
holding grazing permits or licenses and persons whose
grazing permits or licenses have been or will be canceled
because of such use shall be paid out of the funds appropri-
ated or allocated for such project such amounts as the head
of the department or agency so using the lands shall deter-
mine to be fair and reasonable for the losses suffered by
such persons. ... (43 U.S.C. §315 (q) (1942))
362
14
Even in the navigation field compensation has been allowed
Ito the holder of the private rights because Congress had not
i^lected to assert its full dominant power, FPC v. Niagara Mohawk
tt»ower Corp. , 347 U.S. 239 (1954); U. S. v. Gerlach Live Stock
Eo., 339 U.S. 725 (1950). In the Gerlach case the Court said:
. . .[T]hat Friant Dam in fact bears some relation to
control of navigation, we think nevertheless that Congress
realistically elected to treat it as a reclamation project.
. , .Whether Congress could have chosen to take claimant's
rights by the exercise of its dominant navigation servitude
is immaterial [because it didn't elect to do so here).
And in the Niagara Mohawk case, the Court said:
We conclude, as did the Court of Appeals, that even
though respondent's water rights are of a kind that is
within the scope of the Government's dominant servitude, the
Government has not exercised its power to abolish them.
In another case relating to the licensirtg of on
navigable streams ( Cooley v. Board of Wardens , 53 U.S. -.)
'299 (1851)), the Supreme Court upheld the power of Con<., o
'require pilots to comply with state law. The court note, ^nat
until it became necessary for Congress to exert its powe* ,
. . .it should be left to the legislation of the
States; that it is local and not national; that it is likely
to be the best provided for, not by one system, or plan of
regulations, but by as many as the legislative discretion of
the several States should deem applicable to the local
peculiarities of the ports within their limits.
Thus, even if the navigation servitude is dominant, it need
not as a matter of policy be exercised to its full extent.
The Indian Water Rights
Insofar as the power to protect water for the Indians is
concerned, again I believe that the power is and should be
363
15
federal. At the time most Indian tribes were placed on reser-
vations, they had not developed agricultural skills to a point
where full use of water resources was made. Individually they
lacked the educational qualifications to equip them to comply
with state law on appropriation of water. In most instances the
water flowing across the public lands and into and out of the
reservations was unappropriated. The courts simply held that
Congress, in creating the reservations, had intended to reserve
both the land and the water. The Government, we must again note,
was the proprietor. By its Acts of 1866 and 1877 it had offered
the waters to the public, but as to the unappropriated waters the
offer had not yet been accepted. The congressional power which
could make the offer likewise could rescind it before acceptance.
The creation of the reservations did this, and waters thus
withdrawn with the lands were no longer offered by the proprietor
for public entry. Instead, there was reserved to the Indian
tribes the water presently needed for their reservations, and
also the water which they might reasonably need in the future.
No other holding would be moral insofar as the Indians are
concerned, and theoretically the power of the proprietary owner
to withdraw the unaccepted offer and the power of the sovereign
to provide for the Indians can hardly be challenged. See U. S.
V. Ahtanum Irr. Dist. , 236 F.2d 321 (9th Cir. 1956); U. S. v.
Walker River Irr. Dist. , 104 F.2d 334 (9th Cir. 1939); Winters v.
U. S. , 143 Fed. 740 (9th Cir. 1906), affd 207 U.S. 564 (1908);
U.S. V. Conrad Inv. Co. , 156 Fed. 123 (D. Mont. 1907), affd, 161
Fed. 829 (9th Cir. 1908) .
The Property Clauses
In the FPC v. Oregon , 349 U.S. 435 (1955), commonly called
the Pelton case, the fact that the federal project was in part on
Indian lands and in part within a power reserve were used as a
basis for exclusive federal control and non-compliance with the
laws of the state of Oregon. The Federal Power Commission had
licensed the construction of a dam on an non-navigable stream
364
16
solely for the generation of power with no consumptive use of the
water. The power was not for the use of the Indians and the
theory of the earlier cases on Indian rights would not work. ^ The
state of Oregon protested because of alleged interference with
fish and because of non-compliance with Oregon laws.
The Supreme Court held that the matter was exclusively
federal and no compliance with state law was necessary. ^ The
power was said to reside in the property clause which authorizes
Congress to dispose of federal property. The Desert Land Act and
other federal water statutes were held to be inapplicable. The
Indian reservation had been created prior to the enactment of the
Desert Land Act. The Desert Land Act was intended to apply only
to "public lands," and the Court held that lands in an Indian
reservation were no longer public lands. The power withdrawal,
however, had occurred about 1910, long after the date of the
Desert Land Act. The problem was to determine whether Congress,
by creating the procedure for withdrawing lands for power
purposes, had intended to have the withdrawal also withdraw the
unappropriated water. If the power withdrawal was intended to
constitute a withdrawal of the unappropriated water, then there
is nothing wrong with the holding. But if Congress, by
permitting the withdrawal of the land, had not intended the land
withdrawal of the water, then the various federal water statutes
should control and federal agencies should have been required to
comply with the state law to get the water for the power project.
Thus, the holding of the Supreme Court in the Pelton case is that
the subsequent withdrawal of federal lands for power purposes
impliedly superseded the Desert Land Act. , Mr. Justice Douglas
dissented because he did not think that such was the
â– congressional intent.
While there is no theoretical reason why Congress, in
exercising the power of the proprietor under the property clauses
of the Constitution, cannot withdraw its offer of unappropriated
waters and remove the same from state control, still such a
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17
far-reaching change of policy ought not to rest on implication.
If such is the intent of Congress in providing machinery for
withdrawal of land for various federal purposes, that intent
ought to be express.
On June 23, 1958, the United States Supreme Court decided
four cases which in the language of the court presented "issues
of basic importance to Federal Reclamation laws." The cases are
known generally as the Ivanhoe cases ( Ivanhoe Irr. Dist. v.
McCracken, 357 U.S. 275). In these cases the Supreme Court of
California had refused to confirm certain contracts between two
state irrigation districts and a water agency on the one hand and
the United States on the other (47 Cal.2d 597 (1957)). The
California court found the contracts invalid on several grounds.
The dominant power of the federal government in regard to the
management and disposal of federal property was again pronounced.
On appeal, the U. S. Supreme Court said:
In developing these projects the United States is
expending federal funds and acquiring federal property for a
valid public and national purpose, the promotion of agricul-
ture. This power flows not only from the General Welfare
Clause of Art. I, Section 8 of the Constitution, but also
from Art. IV, Section 3, relating to the management and
disposal of federal property. As this Court said in United
States V. San Francisco, 310 U.S. 16, 29-30 (1940), this
"power over the public land thus entrusted to Congress is
without limitations. And it is not for the courts to say
how that trust shall be administered. That is for Congress
to determine."
Also beyond challenge is the power of the Federal
Government to impose reasonable conditions on the use of
federal funds, federal property and federal privileges.
[cases cited) The lesson of these cases is that the Federal
Government may establish and impose reasonable conditions
relevant to federal interest in the project and to the
over-all objectives thereof. Conversely, a State cannot
compel use of federal property on terms other than those
prescribed or authorized by Congress. Public Utilities
Commission ol California vT United States, 335 U.S. 534
(1938) . Article VI of the Constitution, of course forbids
state encroachment on the supremacy of federal legislative
action. (357 U.S. at 294-95) (emphasis added)
366
18
Other Dominant Federal Powers
Article VI of the United States Constitution expressly
provides that:
This Constitution, and the Laws of the United States
which shall be made in Pursuance thereof; and all Treaties
made, or which shall be made, under the Authority of the
United States shall be the supreme Law of the Land; and the
Judges in every State shall be bound thereby, any Thing in
the Constitution or Laws of any State to the Contrary
notwithstanding.
As was noted by the U.S. Supreme Court in the above quota-
tion from the Ivanhoe cases, "state encroachment on the supremacy
of federal legislative actions" is forbidden. It must be assumed
under this language that any treaty made by the United States
concerning the use of waters of international streams would be
binding upon the several states. So also might the power of the
federal government to provide for the defense needs of the
country. This was suggested in the case of U. S. v. Public Util.
Comm'n , 141 F. Supp. 168 (N.D. Calif. 1956), aff'd, 355 U.S. 534
(1958) . This controversy arose over the constitutionality of a
California statute which provided that the state Public Utilities
Commission might permit common carriers to transport property for
the United States at reduced rates "to such extent and subject to
such conditions as it may consider just and reasonable." The
right of the military to contract freely with privately owned
carriers was asserted. A three-judge court held the statute to
be unconstitutional, on the grounds that the State of California
could not regulate the federal government in the performance by
it of its functions.
In a case decided August 27, 1958, a district court held
that the federal government did not need to procure from the
State Engineer for the State of Nevada a permit to drill wells on
reserved lands constituting the Hawthorns Naval Ammunition Depot.
Nevada ex rel Shamberger v. U. S. , 167 F. Supp. 600 (D. Nev.
195B) ^
367
19
In 1960 I delivered a papers to the Western Resources
Conference in Denver on Resource Development. My paper was
entitled "Conflicts Between the Upper and Lower Basins on the
Colorado River". I there noted:
It must always be remembered that the Federal Govern-
ment originally had a dual interest in the river. The first
was a role of a sovereign, exercising the various powers
granted to it by the Constitution (power to regulate com-
merce, art. I, sec. 8; the war power, art. I, sec. 8; the
general welfare clause, art. I, sec. 8; treaty power, art.
VI) . The second involved the rights of a proprietary owner
of Western lands and the waters arising on them. The
sovereign powers granted to the Federal Government by the
Constitution could not as a matter of constitutional law
have been reconveyed by Congress to the several states
( Cooley V. Board of Wardens , 53 U.S. (12 How.) 299 (1851)),
and the signing of the compact did not, in any event,
purport to have that effect. Thus, problems which were of
local concern and therefore were left at the time of the
compact to local state action can at some future time become
of national concern justifying national regulation.
As is noted by Messrs. Frankfurter and Landis:
". . . In a zone for legislation open both to
Congress and the States, the controlling facts justify,
at least for the time being, co-operative State adjust-
ment. Congress does not surrender any of its powers;
it merely finds no occasion for its present exercise of
them. There is, therefore, no 'delegation' of its
power in any legally significant use of the term. But
Congress does not foreclose the future. If and when
circumstances which now call for solution through
compact change. Congress is wholly free to assume
control. . ." ("The Compact Clause of the Constitution
— A Study in Interstate Adjustments", 34 Yale Law
Journal 685 (1925))
I then proceeded to discuss the disputes in the Lower Basin
between Arizona and California in regard to the division of the
Lower Basin water among the Lower Basin states. I noted that
some problems in connection with the river development are local,
some are regional and some are national, but that if the states
should fail to reach an agreement and thus leave a void, "cer-
tainly Congress will have the power" under the ever-expanding
368
20
concept of the commerce clause to re-enter the field by direct
legislation. Because Congress may legislate directly in regard
to many of the future problems arising both between the Upper and
Lower Basins and between states within either basin, we simply
cannot assume that the compact has solved all problems, nor that
the states will be left free to settle their differences. This
proved to be prophetic. Arizona and California were not able to
resolve their differences and again went to the U, S. Supreme
Court for a division of the water. In 1963, the court held that
Congress had the power to allocate the water of an interstate
stream among the affected states and that by adopting the Boulder
Canyon Project Act in 1928, Congress had done precisely that.
See Arizona v. California , 373 U.S. 546 (1963).
I was personally troubled with the decision because I had
been following the allocation of water among the Colorado Basin
states for many years and I do not know of anyone who was of the
opinion that Congress had undertaken in 1928 to deal with that
problem. It was such an important matter that one would have to
assume that if Congress were intending to make the interstate
allocation among Nevada, Arizona and California, that intention
would have been expressed in the Boulder Canyon Project Act and
would have been reflected in the Congressional debates. It is
far too important to the states involved to have simply been
enacted without debate. Three justices dissented, not because
they doubted the power of Congress to exclude the states, but
because they did not think Congress had intended to do so. One
of the justices noted that there was a "pervasive hostility"
among westerners to federal control of water rights in any form.
He also noted that when it was suggested that Congress might
legislate in this area, a storm of doubt arose as to the consti-
tutional power of Congress to do so. The states had
unsuccessfully responded by asserting that the only
constitutional methods of apportioning the river were by a suit
among the states in the U. S. Supreme Court, or by an interstate
compact. A dissenting justice, Mr. Justice Harlan, stated that
369
^r
he saw no constitutional objection to a legislative apportionment
of the water, but did not think Congress had intended to do so
and neither do I. He said:
When plans for development of the Lower Basin threat-
ened the rights of the upper States, they did not seek the
simple (and in my view constitutionally unobjectionable)
solution of a legislative apportionment. They employed
instead the cumbersome method of interstate compact, which
required authorization by Congress and by seven state
legislatures prior to negotiation and ratification by the
same eight bodies thereafter. When it began to appear that
Arizona would not ratify the compact, Congress still did not
legislate a general apportionment. . . .
It is utterly incredible that a Congress unwilling
because of concern for States' rights even to limit Cali-
fornia's maximum consumption to 4,400,000 acre-feet without
the consent of her legislature, intended to give the Secre-
tary of Interior authority without California's consent to
reduce her share even below that quantity in a shortage.
He concluded that Congress throughout the dispute had
exhibited great reluctance to interfere with the division of the
water by direct legislative action and that this was because of a
deep and fundamental mistrust by the states of federal inter-
vention and a profound regard by Congress for state sovereignty.
Thus, when Congress was forced to legislate with respect to the
problem, or face defeat of the project, it chose narrow terms
appropriate to the narrow problems before it, and even then
"acted only indirectly to require California's consent to limit-
ing her consumption." He concluded that it is inconceivable that
such a Congress intended that the sweeping federal power which it
had declined to exercise itself would be exercised at the un-
bridled discretion of an administrative officer.
Mr. Justice Douglas, in his dissenting opinion, noted that
the question is not what Congress has the authority to do but
rather the kind of regime under which Congress has built this and
other irrigation systems in the West. "Heretofore those regimes
have been posited on the theory that state law determines the
370
22
^otment of waters coming through the irrigation canals that are
fd by federal dams." He noted that the property right in the
Bter right is separate and distinct from the property right in
l^e reservoirs, ditches or canals. He characterized the majority
pinion as a bald "attempt by judges. . .to spin their own
jhilosophy into the fabric of the law, in derogation of the will
^ the legislature."
K
t
J^ Nevertheless, it is now established law that Congress can
^jtill legislate to solve these interstate stream problems. It
aid so again in adopting filling criteria for Lake Powell. More
recently in Sporhase, et al v. Nebraska, ex rel Douglas, Attorney
General , 458 U.S. 941, the court noted that in an underground
^asin which intruded into several states. Congress does have the
power to allocate the water and to regulate its use. This
statement, which was not necessary to the decision, has caused
great concern in the western states. However, it is consistent
with what I have always believed the law to be.
,f The federal government originally was the proprietary owner
of the land and the water. This has been established by a long
line of decisions, and is perhaps best reflected by the following
quotation from Alabama v. Texas , supra ;
"'For it must be borne in mind that Congress not only
has a legislative power over the public domain, but it also
exercises the powers of the proprietor therein. Congress
•may deal with such lands precisely as an ordinary individ-
ual may deal with farming property. It may sell or withhold
them from sale.' [citing cases) "Article 4, Section 3, CI.
2 of the Constitution provides that 'The Congress shall have
Power to dispose of and make all needful Rules and Regu-
lations respecting the Territory or other Property belonging
to the United States.' The power over the public land thus
entrusted to Congress is without limitations. 'And it is
not for the courts to say how that trust shall be adminis-
tered. That is for Congress to determine.' United States
V. California, 332 U.S. 19, 27, 67 S.Ct. 1658, 1663, 91
L.Ed. 1889: "We have said that the constitutional power of
Congress [under Article IV, S3, CI. 2] is without limita-
tion. United States v. City and County of San Francisco,
310 U.S. 16, 29, 30, 60 S.Ct. 749, 757, 84 L.Ed. 1050."
371
23
Under the United States Constitution, Congress is thus given
the authority over federal property, under the clause which is
commonly known as the property clause. Congress initially
acquiesced in the squatters settling in the west and using the
federal land and water. Then in 1866, Congress expressly
authorized the acquisition of ownership of mining properties and
water rights through compliance with state or local law and local
customs. Where a private individual has followed local law and
perfected a water right, it is a property right protected by the
U. S. Constitution and it cannot be taken without compensation.
The Ninth Circuit Court of Appeals expressly so held in Hunter v.
United States , 388 F.2d. 148 (C.A. 9 Cal., 1967).
However, where there is unappropriated water which
originates on the public land, the United States, through Con-
gress, can withdraw the unappropriated water and thereby prohibit
new appropriations. The court has implied such a congressional
intent under numerous circumstances where federal land has been
set aside for special use. The initial reservation was confirmed
in 1907 in the case of Winters v. United States , supra , where an
Indian reservation was held also to reserve Indian water. The
court has since extended this reservation doctrine to many other
situations and it has become known as the federal reserved rights
doctrine.
In addition to its rights as a proprietary owner, the United
States has numerous sovereign powers as a federal government. It
has the power to control the waters of navigable streams under
the commerce clause and it exercises this power as a basis for
federal legislation in many areas, such as the basis for clean
water legislation. It has powers under the property clause to
manage waters on federal lands, such as Fort Douglas, where the
government built Red Butte Reservoir without a state permit and
on the U. S. Forest where the federal government built Mill Creek
Reservoir without a state permit. It is used to regulate
navigation. This was the basis for the power to build Boulder
372
24
over Arizona's objection that the project had no state water
fjrinit. It is used to drill wells on lands withdrawn for a
[litary base, again without a state permit, etc. Congress also
Is the power to provide for the general welfare and could
(gislate in this area for the health, welfare and safety of the
llople. Congress also has the power to control projects built
Hth federal funds.
Thus, the federal government does have powers, both as a
proprietary owner and as a government, over much of the water in
the west. In the case of the Bureau of Reclamation, in 1902
Pongress provided that the Secretary of the Interior would secure
yater for its projects through filings made under state law and
ihe U. S. Supreme Court in a fairly recent decision, California
V, United States , 440 U.S. 59, (1978), held that the mandates of
'^he statute were controlling on the Bureau, and that even though,
'as a matter of basic power, the federal government may have
proceeded without a state permit. Congress had provided
Otherwise. We thus have a state-federal partnership and we have
on many streeims state and federal systems co-existing, but
generally speaking, the federal government has deferred to the
states permitting each state to adopt its own system for
allocating water.
In the east, where rainfall is generally adequate to mature
crops, and where there is little public land, the states have
followed the law of England with private rights to use the waters
o£ the stream being dependent upon the ownership of land adjacent
to the stream. In England the basic value of water was in the
use of the stre2un for power purposes and the use of the- water for
transportation. The law which developed was, therefore, calcu-
lated to keep the water in the streaun. This system would never