Opinion ID: 2637690
Heading Depth: 1
Heading Rank: 4

Heading: The LGWUs

Text: ¶ 29 The LGWUs first argue material injury because the lack of priority dates and other attributes for the sources of water in the agreement makes it impossible to tell if water will be available to fulfill their water rights. [11] But the water from the Gila River system allocated to GRIC under the settlement agreement retains all its pre-existing attributes and, as noted below, the LGWUs are not bound by the settlement. Thus, if the LGWUs are unable to obtain sufficient water to satisfy their claimed entitlement, they remain free to assert their rights in the general stream adjudication. That GRIC's settlement means it no longer will serve in its traditional adversarial role against various upstream water users does not establish material injury to the LGWUs. ¶ 30 The LGWUs also contend that applying the Special Order to preclude them from litigating their objections to this settlement violates their procedural and substantive due process rights. Specifically, the LGWUs argue that the settlement agreement results in a taking of their vested property rights by preventing them from making calls on the river, confirming water rights among the settling parties, requiring parties whose claims have not been adjudicated to contribute water to GRIC, and granting to other users (via the settlement agreement's safe harbor provisions) water rights that displace their senior rights. The Special Order, the LGWUs assert, prevents them from pursuing and establishing those claims. ¶ 31 In upholding the Special Order's application in Gila River VII, however, we stated that, [t]hrough the Special Order, this Court sought to balance the rights of Indian tribes to seek settlement of their claims against the rights of other claimants. 217 Ariz. at 279 ¶ 11, 173 P.3d at 443. For the reasons discussed earlier, supra ¶¶ 10-13, we are not inclined to overturn or deviate from the Special Order at this late date, particularly when doing so would frustrate or unduly delay good-faith settlements. Therefore, the adjudication court correctly rejected the LGWUs' broad challenge to the Special Order itself and, instead, properly focused on whether any of their objections fell within the Special Order's limited scope. ¶ 32 The LGWUs next assert that the adjudication court's judgment and decree unlawfully binds them because the settlement agreement does not expressly provide otherwise. The LGWUs are not bound by the settlement or judgment, however, because they are not settling parties and did not sign either the settlement agreement or the proposed Paloma Agreement. [12] See Martin v. Wilks, 490 U.S. 755, 762, 109 S.Ct. 2180, 104 L.Ed.2d 835 (1989) (A judgment or decree among parties to a lawsuit resolves issues as among them, but it does not conclude the rights of strangers to those proceedings.), superseded by statute on other grounds, 42 U.S.C. § 2000e-2(n) (1991); see also Gila River VII, 217 Ariz. at 281 ¶ 22, 173 P.3d at 445. ¶ 33 Paragraph 24 of the judgment and decree provides: Nothing in the Settlement Agreement shall affect the right of any Party, other than the Community and the United States, on behalf of the Community, Members and Allottees, to assert any priority date or quantity of water for Water Rights claimed by such Party in the Gila River Adjudication or other court of competent jurisdiction. In a footnote, the judgment and decree states that [c]apitalized terms used [therein] shall be as defined in the Settlement Agreement. And the settlement agreement states the term `Party' shall mean an entity represented by a signatory to this Agreement. Agreement ¶ 2.129. ¶ 34 Nonetheless, in accordance with the clear intent of the adjudication court, the understanding of the settling parties, applicable legal principles, and common sense, we interpret Party in the judgment and decree as including all parties in the general stream adjudication. Based on this interpretation of the judgment and decree, with which GRIC and the United States agreed at oral argument in this Court, neither the LGWUs nor any other non-settling claimants (such as ASARCO) in the adjudication are bound by the terms of the settlement agreement or otherwise prevented from asserting their rights to Gila River water. ¶ 35 Although the GRIC settlement agreement provides, with certain exceptions pertaining to Indian tribes, that the Globe Equity Decree shall be binding upon all parties to these proceedings, the adjudication court omitted that provision from its judgment and decree. As that court pointed out, however, Arizona Revised Statutes (A.R.S.) § 45-257(B)(1) (2003) requires the adjudication court to accept the determination of water rights and the appropriation dates in prior decrees unless such rights have been abandoned. [13] Id. Thus, although the LGWUs may argue they have higher priority rights, they cannot deny that GRIC and the United States on GRIC's behalf possess the rights and priority dates set forth in prior decrees, absent abandonment. ¶ 36 Among other constitutional challenges, the LGWUs argue the settlement agreement's safe harbor provisions create an unconstitutional riparian system of water allocation. Under those provisions, GRIC, the San Carlos Irrigation & Drainage District, and the United States agreed not to challenge, object to, or call on qualified users that were not parties to the Globe Equity Decree as long as their water use complied with stated conditions. Agreement ¶¶ 26.8.1, 26.8.2.1, 26.8.2.3. The LGWUs also claim the settlement agreement violates Arizona's severance and transfer of water rights statute, see A.R.S. § 45-172(A)(5), because the Paloma Irrigation & Drainage District did not approve any changes in the points of diversion or places of use for the water sources in the agreement. ¶ 37 As did many of the objections raised in Gila River VII, however, the LGWUs' constitutional and statutory arguments fall outside the Special Order's limited scope of review and can be addressed at a later date without injury to the LGWUs. [14] 217 Ariz. at 280 ¶ 17, 173 P.3d at 444. In any event, the safe harbor provisions do not change the system for allocating waterthey simply protect eligible users with junior water rights from receiving a call from GRIC to satisfy its senior rights. The provisions also do not prevent any other party from asserting its priority water rights. In addition, because the LGWUs are not bound by the settlement agreement, they may seek relief if the safe harbor provisions ultimately result in an adverse impact on their water rights. See Gila River VII, 217 Ariz. at 280 ¶ 19, 173 P.3d at 444. Likewise, the Paloma Irrigation & Drainage District may bring a claim later if it determines that water is being contributed to GRIC in violation of A.R.S. § 45-172(A)(5). ¶ 38 The LGWUs next assert the adjudication court should have included CAP and Blue Ridge stored water when it considered the quantity of water GRIC obtained by settlement. In its assessment, however, ADWR excluded only CAP and reclaimed water from its determination whether GRIC settled for less water than it could have proven at trial. [15] Assessment at 8-4 to 8-5. CAP water is delivered pursuant to contract with the federal government and is not subject to appropriation under state law. Maricopa-Stanfield Irrigation & Drainage Dist. v. United States, 158 F.3d 428, 431 (9th Cir.1998). Therefore, CAP water, which is outside the jurisdiction of the adjudication court, was properly excluded from ADWR's analysis. See Gila River VII, 217 Ariz. at 283 ¶¶ 31-32, 173 P.3d at 447. ¶ 39 Finally, the LGWUs claim that the settlement agreement breaches the 1945 Arlington Agreement, in which GRIC and the United States agreed to restrict their water use on the reservation so that Arlington Canal Company would continue to receive water flows. The settlement agreement, however, does not alter Arlington's rights under the Arlington Agreement or prevent Arlington from asserting such rights. In addition, as noted above, we interpret the judgment and decree to preserve the rights of all non-settling parties in the adjudication. [16] In sum, the adjudication court did not err in rejecting the LGWUs' objections to the settlement.