In 1978, the U.S. Supreme Court ruled in U.S. v. New Mexico 438 U.S. 696, that state law applies to the right to use of water in national forests unless the right to use the water was reserved to the United States at the time of withdrawal of the federal lands from the public domain. The Supreme Court, however, made it clear that the existence of implied federal water rights depends on a finding of congressional intent to reserve such rights, either expressly or by necessary implication. When the asserted water right is necessary only to fulfill purposes other than the primary purposes for which the land was reserved, the contrary inference arises that Congress intended federal agencies to acquire water for such secondary purposes in accordance with state law. 424, affirmed that the U.S. may assert riparian rights for California lands held in federal reservations, subject to the laws and jurisdiction of the State. The Secretary is directed to manage the scenic area in a manner consistent with the protection of water rights of the State of California or any political subdivision thereof including the City of Los Angeles and that such management, under provisions of this Act, shall not affect or impair the operation of any water diversion activity in the Mono Basin or the scenic area granted under the laws of the State of California.
Mono Lake is within the scenic area.
The rights to use water tributary to Mono Lake, and the manner of exercise of such rights is a matter to be administered by the State of California pursuant to State law.