Strawberry Water Users Ass'n v. Bureau of Reclamation

2005 UT 64
This opinion is subject to revision before final
publication in the Pacific Reporter.
IN THE SUPREME COURT OF THE STATE OF UTAH
----oo0oo----
In the Matter of the General Nos. 20040270
Determination of All the Rights 20040334
to the Use of Water, Both Surface
and Underground, Within the
Drainage Area of the Uintah Basin
in Utah.
Strawberry Water Users
Association, a Utah nonprofit
corporation; and Strawberry
High Line Canal Company, a
Utah nonprofit corporation,
Petitioners and Appellants,
v.
Bureau of Reclamation;
United States of America;
and Department of the F I L E D
Interior,
Respondent and Appellees. September 27, 2005
---
Third District, Salt Lake
The Honorable Timothy R. Hanson
No. 360057298
Eighth District, Duchesne
The Honorable John R. Anderson
No. 560800056
Attorneys: Shawn E. Draney, Keith A. Call, Scott H. Martin,
Salt Lake City, for Strawberry parties
Norman K. Johnson, L. Ward Wagstaff, Michael
Steeves, Salt Lake City, for Utah State Engineer
Paul M. Warner, U.S. Att’y, Daniel D. Price, Asst.
U.S. Att’y, Salt Lake City, and Kathryn E. Kovacs,
Washington, D.C., for Bureau of Reclamation,
Department of the Interior
---

1 “Strawberry Water Users” includes the Strawberry Water
Users Association and the Strawberry Highline Canal Company.
Occasional reference may also be made to “Strawberry” or to the
“Association.” These are intended to include the water companies
and/or all shareholders.
2 “Strawberry Valley Project” may be referred to as “SVP” or
simply as the “Project.” Reference is also made to “Project
water.”
3 Case No. 360057298. The action began as a private suit,
but was converted to a general adjudication by this court in
1944. Salt Lake City v. Anderson, 148 P.2d 346, 349 (Utah 1944).
Nos. 20040270, 20040334 2
McIFF, District Judge:
INTRODUCTION
¶1 This appeal probes whether jurisdiction should lie in
the federal district court or in the courts of the State of Utah.
The dispute centers around competitive applications filed by the
Strawberry Water Users1 and the United States with respect to
water imported from the upper reaches of the Duchesne River, a
Colorado River tributary, into the Great Basin. The water is
collected in the Strawberry Reservoir as part of the Strawberry
Valley Project2 and delivered through a transbasin diversion
tunnel for use primarily in the southern end of Utah County. The
parties before the court are the Strawberry Water Users, the
United States, and the Utah State Engineer.
¶2 The Strawberry Water Users argue that the water rights
in question are the product of following the application and
beneficial use requirements of Utah law and that Utah courts have
exclusive jurisdiction to adjudicate claims relating thereto.
“[T]he United States disagrees and contends that Strawberry’s
rights to use water derive solely from its contracts with the
United States.” It asserts “the proper forum for resolution of
Strawberry’s contract-based claims is federal district court.”
The State Engineer has submitted memoranda in partial support of
the position of the United States.
¶3 The parties have not always been so certain about
jurisdiction. This litigation began on April 24, 2001, when the
Strawberry Water Users filed a petition for an interlocutory
decree in the general adjudication of water rights pending since
1936 in Utah’s Third Judicial District Court in and for Salt Lake
County.3 Strawberry named the United States Bureau of
Reclamation as respondent. One day later, Strawberry filed an

4 Case No. 560800056.
5 Case No. 2:01CV00295 J. On September 21, 2001, the
Strawberry Water Users filed an additional action in the District
Court in Duchesne County, joining the United States as a
defendant (Case No. 010800071 AA, styled Strawberry Water Users
Association v. Robert L. Morgan). This latter action was removed
to the federal court (Case No. 2:02CV0034 J.), where it was
subsequently consolidated with the other federal court action
because it probed several of the same basic legal issues.
3 Nos. 20040270, 20040334
identical petition in the general adjudication of water rights
pending since 1956 in Utah’s Eighth Judicial District Court in
and for Duchesne County.4 One day after that, it filed an action
seeking essentially the same relief in the United States District
Court for the District of Utah.5
¶4 Strawberry’s uncertainty has been matched if not
exceeded by that of the United States and the State Engineer. In
support of its motion to dismiss the consolidated case in the
federal district court, the United States asserted, “[N]either
the state engineer nor the court in this action has jurisdiction
to adjudicate title to water rights under Utah law.” Similarly,
the State Engineer moved to remand to state court “because this
is not a case where the federal courts have original jurisdiction
nor is there any federal question involved.” Further evidence of
the uncertainty of the United States is found in its protest of
Strawberry’s change application filed with the State Engineer:
[A]n adjudication of the [ownership of] water
rights is required before a change of use
application can be processed by the state
engineer for this applicant. However, the
authority to adjudicate water rights is
vested by the Utah Constitution in the [Utah]
courts and not given to the state engineer.
. . . Thus, the applications must be
dismissed pending the necessary adjudication.
¶5 After Strawberry filed its petitions in the state
courts seeking adjudication, the United States made a complete
reversal and urged dismissal for failure to exhaust
administrative remedies. It later withdrew this argument when
the State Engineer granted conditional approval of change
applications for both Strawberry and the United States. The
condition was that the parties obtain a judicial determination
establishing who has the right to file such applications. We
think it fair to conclude that the parties have struggled with

Nos. 20040270, 20040334 4
how best to proceed and that the State Engineer, in particular,
both needs and seeks direction. We note that it is not possible
to flesh out the jurisdictional issue and provide appropriate
guidance without a more extensive discussion of the substance of
the dispute than would normally be required at this stage of the
proceedings.
THE DECISIONS BELOW
¶6 Both the Third and Eighth District Courts dismissed
Strawberry’s petitions for an interlocutory decree under Utah’s
general adjudications statute, Utah Code Ann. §§ 73-4-1 to -24
(2004). The dismissal orders are abbreviated and do not contain
any legal analysis. The Third District Court stated that it “is
not satisfied that petitioners’ claims are properly a general
adjudication proceeding,” and that “petitioners seek to
adjudicate ownership of water rights based upon federal contract,
which should properly be before the Federal Court.” The Eighth
District Court essentially agreed but also determined that the
United States had not been properly joined in the general
adjudication in the Uintah Basin and that suits for interlocutory
orders brought under Utah Code section 73-4-24 do not qualify for
waiver of federal sovereign immunity under 43 U.S.C. § 666
(2005). Because the petitions sought essentially the same relief
in each district court and were dismissed for similar reasons,
the appeals of those dismissals have been consolidated.
STANDARD OF REVIEW
¶7 We review the district courts’ dismissals for lack of
subject matter jurisdiction for correctness and accord no
deference to their legal conclusions. Beaver County v. Qwest,
Inc., 2001 UT 81, ¶ 18, 31 P.3d 1147; see also Peterson v. Bd. of
Educ., 855 P.2d 241, 242 (Utah 1993) (applying the correctness
standard of review to denial of a motion to dismiss based on
governmental immunity).
ANALYSIS
I. REVERSAL WITH GUIDANCE
¶8 After thoughtful review we have determined that the
dismissals should not stand, but we have also determined that the
jurisdictional question does not lend itself to an either/or
response. Depending upon how the parties proceed in light of our
ruling, there could be issues suitable for either or both state
and federal courts. It is our design herein to delineate as best
possible between water law issues over which Utah courts have

6 With minor adjustments, we here embrace a narrative set
forth in Strawberry’s opening brief. It tells the story in an
understandable and useful manner with appropriate reliance upon
historical facts extracted from various federal decisions at all
levels, including the United States Supreme Court.
5 Nos. 20040270, 20040334
exclusive jurisdiction and contract issues arising under the
federal reclamation contracts over which the federal district
court has jurisdiction. Moreover, there may be issues as to
whether contractual arrangements, even if clear, would run afoul
of Utah water law, which the United States Congress has
recognized as controlling. To the extent possible at this
juncture, we have attempted to provide guidance to the parties.
We note particularly our responsibility to correct erroneous
interpretations or assumptions of the State Engineer, who
ultimately looks to this court for direction regarding
application of Utah water law. Before examining the specific
legal issues, we think it imperative to briefly outline the
history of federal water reclamation projects followed by the
particular history of the Strawberry Valley Project and the
origin of the dispute between these parties. We also address the
matter of the United States’ waiver of sovereign immunity
regarding disputes arising from reclamation projects.
II. FEDERAL WATER RECLAMATION PROJECTS
A. History6
¶9 “The final westward migration of the late 1800s
resulted in an enormous demand by settlers for irrigation
systems.” Peterson v. United States Dep’t of Interior, 899 F.2d
799, 802 (9th Cir. 1990). “As early as 1891, settlers in the
western states organized annual irrigation congresses to discuss
their water needs and to urge Congress to fund irrigation
projects.” Id. at 802 n.6. “Western states themselves lacked
the means to finance the enormous systems of dams, reservoirs,
and canals needed to regulate and distribute water from the
western rivers and snow melt.” Id.; see also California v.
United States, 438 U.S. 645, 663 (1978).
¶10 “By the turn of the century, most of the land that
could be profitably irrigated by small-scale private reclamation
efforts had been put to use. Pressure mounted on the Federal
Government to provide the funding for massive projects that would
be needed to complete the reclamation.” California, 438 U.S. at
649; see also Peterson, 899 F.2d at 802; United States v. Alpine
Land & Reservoir Co., 887 F.2d 207, 209 (9th Cir. 1989).
Responding to the pressing demand for financial assistance in

Nos. 20040270, 20040334 6
funding reclamation projects, Congress enacted the Reclamation
Act of 1902. Pub. L. No. 57-161, 32 Stat. 388 (codified as
amended at 43 U.S.C. § 371 (2005)).
With the Reclamation Act of 1902, Congress
committed itself to the task of constructing
and operating dams, reservoirs, and canals
for the reclamation of the arid lands in 17
western states. The projects were to be
built on federal land and the actual
construction and operation were to be in the
hands of the Secretary of the Interior.
Peterson, 899 F.2d at 802 (citing California, 438 U.S. at 650,
664).
¶11 When Congress enacted the Reclamation Act of 1902, it
had far greater expectations for the program than to simply
increase agricultural production. With the Reclamation Act,
Congress created a blueprint for the orderly development of the
West, and water was the instrument by which that plan was to be
carried out. See Ivanhoe Irrigation Dist. v. McCracken, 357 U.S.
275, 292 (1958). Congress’s plan included purposeful and
continued deference to state water law, which was to govern the
ownership of all water rights absent a clear Congressional
directive to the contrary. See California, 438 U.S. at 653-70,
678-89; United States v. New Mexico, 438 U.S. 696, 702 & n.5
(1978). Section 8 of the Reclamation Act left little room for
doubt.
Nothing in this Act shall be construed as
affecting or intending to affect or in any
way interfere with the laws of any state
. . . relating to the control, appropriation,
use, or distribution of water . . . and the
Secretary of the Interior, in carrying out
the provisions of this Act, shall proceed in
conformity with such laws . . . .
43 U.S.C. § 383 (emphasis added).
¶12 The monies initially provided by Congress under the
1902 Reclamation Act were placed in a separate “Reclamation Fund”
to be used by the Secretary of the Interior to fund construction
of reservoirs and irrigation works. See, e.g., 43 U.S.C. § 391;
Twin Falls Canal Co. v. Foote, 192 F. 583, 585 (D. Idaho 1911).
Using this fund, the Bureau of Reclamation was able to construct
large dam and reservoir projects similar to the Strawberry Valley

7 The factual narrative relating to the Strawberry Valley
Project is taken essentially from the allegations of petitioners’
complaint, which was dismissed by both the Third and Eighth
District Courts. These allegations must be deemed true, and this
court must consider all reasonable inferences to be drawn
therefrom in a light most favorable to Strawberry. Peterson v.
Delta Airlines, Inc., 2002 UT App 56, ¶ 2, 42 P.3d 1253; Prows v.
State, 822 P.2d 764, 766 (Utah 1991). Where noted, we also rely
to a limited extent on factual allegations set forth by the
United States in its answer and counterclaim filed in the federal
court and attached as an addendum to its brief. We have found
the latter necessary in order to flesh out what appears to be at
stake in this litigation and the proper forum for adjudication.
7 Nos. 20040270, 20040334
Project. See, e.g., id.; Burley Irrigation Dist. v. Ickes, 116
F.2d 529, 530 (D.C. Cir. 1940).
¶13 After construction of a particular reclamation project
was completed, the water users or irrigation district, as the
contracting party, was required to repay all the construction
costs of the project. See 43 U.S.C. §§ 419, 461. In this
manner, the Reclamation Fund was to be replenished and used in
turn to fund new projects. All monies received thereafter from
the sale and disposal of public lands were also to be paid into
the fund to the credit of the project on which such lands were
located. See 43 U.S.C. §§ 374-375, 391-392.
B. The Strawberry Valley Project7
¶14 On December 15, 1905, the Secretary of the Interior,
acting under authority of the Reclamation Act, authorized
construction of the Strawberry Valley Project. The Project was
to include a large complex of many different water works,
including a series of diversion dams and feeder canals in the
upper Duchesne River drainage. These included the Strawberry
Dam, the Strawberry Tunnel driven through the Wasatch Mountains
from the Strawberry Reservoir on the east side of the said
mountains into Sixth Water Creek on the west side, allowing the
water to flow down Diamond Fork to its confluence with the
Spanish Fork River and farther on down that river to a point of
rediversion into delivery canals for beneficial use on lands
being acquired principally by homesteaders in southern Utah
County.
¶15 In anticipation of the project, one Frank C. Kelsey had
filed with the State Engineer Application No. 79 for the
appropriation of 100,000 acre-feet of water from the Strawberry
River, Trail Hollow Creek, Indian Creek, and Horse Creek--all
located in the Duchesne River drainage. The application, filed

Nos. 20040270, 20040334 8
January 27, 1904, provided that the water would be stored in the
then-proposed Strawberry Reservoir for release and transbasin
diversion for beneficial use in southern Utah County. The
application was assigned to the Strawberry Irrigation and
Reservoir Committee, a Strawberry predecessor, on May 16, 1905,
and was reassigned to the Bureau of Reclamation on August 11,
1905. The Utah State Engineer approved Application No. 79 on
January 23, 1906, subject to proof of actual appropriation and
beneficial use, which would take many more years to achieve.
¶16 The Bureau of Reclamation constructed the Strawberry
Valley Project between 1906 and 1915, thus opening the door for
homesteaders to make application to beneficially use Project
water. Once accepted and approved by the United States, the
water rights applications constituted binding contracts between
the applicants and the United States. Each applicant became
obligated to put the water to beneficial use and to repay a
proportionate share of construction costs and annual operation
and maintenance costs of the Project. Upon full performance, the
applicant became entitled to a certain quantity of Project water
annually in perpetuity. A typical patent for the homesteaded
lands described the tract “together with the right to the use of
water from the Strawberry Valley Reclamation Project as an
appurtenance to the irrigable lands in said tract TO HAVE AND TO
HOLD . . . unto the said [patentee] and to his heirs and assigns
forever.”
¶17 In 1924, Congress adopted the Fact Finders Act, Pub. L.
No. 68-292, 43 Stat. 702 (codified as amended at 43 U.S.C. § 500
(2005)). This Act mandated that operation and maintenance of
reclamation projects be turned over to a water users association
or an irrigation district. Thereafter, the United States was
obliged to deal with associations or districts rather than
thousands of different individual water users. The Strawberry
Water Users Association had actually been formed in 1922 for the
very purposes contemplated by the Fact Finders Act, which was
adopted two years later. Virtually all of the individuals and
entities that had entered into contracts with the United States
for Project water became Strawberry Water Users Association
shareholders. Their water rights were transferred to the
Association in exchange for shares of stock. In turn, the
Association entered into contracts with the United States to
repay the then-unpaid construction costs of the Project, operate
and maintain the Project, and deliver water to the Project water
users who were now shareholders. The contracts between the
Association and the United States, which have governed the
relationship of these parties until recent years, are dated

8 Between 1910 and 1934, the United States filed five
additional applications to appropriate water and eventually
obtained certificates of appropriation. As to each one, the
proof of appropriation filed with the State Engineer was based
upon beneficial use by Strawberry Water Users and/or other
Project water users. As to these five applications, the
certificates of appropriation were also issued in the name of the
United States for the use in perpetuity by Strawberry or other
Project water users. Some of these are for irrigation, some for
electrical generation. Only one, Certificate of Appropriation
No. 2116 (later designated as water right No. 43-3102), involves
major acre-footage. The certificate is for 60,000 acre-feet for
use on the same 53,522.24 acres located in southern Utah County
that is the subject of Application No. 79.
9 Nos. 20040270, 20040334
September 28, 1926 (“1926 Contract”), November 20, 1928 (“1928
Contract”), and October 9, 1940 (“1940 Contract”).
¶18 By the early 1930s, the appropriation efforts were
complete and proofs of appropriation were filed with the State
Engineer. On March 13, 1933, the Engineer issued Certificate of
Appropriation No. 2115 (later designated as water right 43-3001)
for the 100,000 acre-feet covered by Application No. 79, which
had originally been filed in 1904. The certificate was based
exclusively upon the beneficial use of Project water by the
individual Strawberry users whose contractual interests had been
assigned to the Association in exchange for shares of stock. The
certificate provided for capture and storage in Strawberry
Reservoir, delivery down Diamond Fork into the Spanish Fork River
for rediversion into the Highline Canal for irrigation of
53,522.24 acres of land, specifically describing such land, all
of which is located in southern Utah County. The certificate was
issued in the name of the United States and remains in the name
of the United States at present.8
¶19 On December 23, 1974, the Strawberry Water Users paid
the United States the final installment due on construction of
the Strawberry Valley Project. This satisfied the combined
obligation of all the individual parties who conveyed their
rights to the Association in exchange for shares of stock. All
costs incurred by the United States in appropriating and
perfecting the Strawberry water rights were fully repaid, and the
United States no longer held any type of lien on the patented
land or the right to use the Project water appurtenant to such
land even though the certificates of appropriation remained in
the name of the United States.

9 These facts and those which follow have been gleaned from
the Strawberry petitions filed in the Third and Eighth District
Courts and the counterclaim filed by the United States in the
federal district court. There does not appear to be a dispute
about these facts, only about the legal consequences flowing
therefrom. It is not possible to understand the dispute of these
parties and what is really at stake in this litigation or to
properly analyze the jurisdictional issues without inclusion of
these facts.
Nos. 20040270, 20040334 10
¶20 Were the story to end here, the issues would be easier
to frame and to resolve. However, in mid-1985, a decade or more
after full performance of the contracts by which Strawberry
obtained rights to use Project water in perpetuity, the
Strawberry Dam was replaced by the Soldier Creek Dam, a Central
Utah Project facility also constructed by the Bureau of
Reclamation. The new dam increased the capacity of Strawberry
Reservoir from roughly 270,000 acre-feet to more than 1,100,000
acre-feet.9 After the enlarged reservoir was in place, the
parties entered into what they refer to as the 1991 Operating
Agreement. Under the terms of this agreement, Strawberry is
guaranteed annual delivery of 61,000 acre-feet from the enlarged
reservoir. Strawberry’s petition alleged that it had
historically received some 70,000 acre-feet. The United States
in the federal action claims the historical average was 61,500
acre-feet. Whatever the figure, it appears that it no longer
varies with the ebbs and flows of wet and dry years, but is fixed
at 61,000 acre-feet annually. It also appears that the United
States relies heavily upon the 1991 Operating Agreement to
advance its arguments in this dispute.
C. Origin of the Current Dispute
¶21 The current dispute first arose in August 1997, when
Strawberry filed three change applications seeking to update and
correctly reflect current points of diversion and place of use of
Project water and to provide for municipal and industrial use.
More specifically, Strawberry sought the right to use Project
water for the irrigation of small lots, including lawns and
gardens, as opposed to larger agricultural tracts. In its
protest before the State Engineer, the United States claimed that
it was the owner of the water and urged the State Engineer to
dismiss the Strawberry applications until the ownership issue
could be resolved, presumably in Utah courts. After the lawsuits
were filed, the United States advanced the further claim that
Strawberry is contractually prohibited from changing use without
consent of the Secretary of the Interior. In due course, the

11 Nos. 20040270, 20040334
United States sought to have all matters adjudicated in the
federal district court.
¶22 Separate and apart from these initial change
applications filed by Strawberry are competing applications filed
by each of the parties in December 1997 seeking to recapture
Project water after it has been fully utilized and passed beyond
the control of either party. These applications are extremely
ambitious and far-reaching. The application of the United
States, filed December 4, 1997, seeks to appropriate 49,200 acre-
feet of return flow of Project water for storage in Utah Lake and
delivery in Salt Lake County. Strawberry’s “exchange
application,” filed eight days later, seeks to recover the return
flow from 64,400 acre-feet by pumping or diverting from existing
wells, springs, and streams in southern Utah County. These
competitive applications raise fundamental Utah water law issues
of first impression that potentially impact appropriators
throughout the Jordan River drainage and beyond.
D. Waiver of Sovereign Immunity–-the McCarran Amendment
¶23 We now consider whether and for what purposes the
United States is subject to joinder in either the federal or the
state court suits that have been filed. We begin with the
proposition that the United States is immune from suit unless
Congress has waived that immunity. Lehman v. Nakshian, 453 U.S.
156, 160 (1981); In re Bear River Drainage Area, 271 P.2d 846,
848-49 (Utah 1954).
¶24 Congress has waived the United States’ sovereign
immunity for joinder in both federal and state court actions
arising out of federal water reclamation projects. It has
consented to joinder in federal district court “to adjudicate,
confirm, validate, or decree the contractual rights of a
contracting entity and the United States regarding any contract
executed pursuant to federal reclamation law.” 43 U.S.C. § 390uu
(2005) (emphasis added). It has consented to joinder in state
court
(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 . . . and the United States is a
necessary party to such suit.

Nos. 20040270, 20040334 12
43 U.S.C. § 666 (emphasis added).
¶25 The consent to joinder in state court came in the
McCarran Amendment to the 1902 Reclamation Act. Section 8 of the
Act had decreed noninterference with state law “relating to the
control, appropriation, use, or distribution of water,” and
further, that “the Secretary of the Interior, in carrying out the
provisions of this Act, shall proceed in conformity with [state]
laws.” 43 U.S.C. § 383 (emphasis added). These mandates had
limited meaning unless the United States could be compelled to
join in state court proceedings. The 82nd Congress came to grips
with this problem in 1952 with the adoption of the McCarran
Amendment. The Amendment had been preceded by the efforts of
most western states to develop orderly and comprehensive
procedures for the general adjudication of water rights.
By the time the McCarran Amendment was
passed, most Western states had adopted some
statutory procedure for the mass adjudication
of water rights. While these statutory
adjudications seemed to promise an end to the
confusing and conflicting adjudication of
water rights in multiple cases, the system
was impaired by the refusal of the federal
government to participate. Since the United
States had large landholdings and extensive
reserved water rights in the West, its claims
of sovereign immunity significantly
diminished the value of the comprehensive
state adjudications. Congress sought to
remedy this problem by enacting the McCarran
Amendment in 1952. See S. Rep. No. 755, 82d
Cong., 1st Sess. 4-6 (1951).
United States v. Oregon, 44 F.3d 758, 765 (9th Cir. 1994)
(citation omitted) (emphasis added).
¶26 The purposes of the McCarran Amendment are clear, and
its language is broad. After providing for joinder, it goes on
to state:
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

13 Nos. 20040270, 20040334
having jurisdiction, and may obtain a review
thereof, in the same manner and to the same
extent as a private individual under like
circumstances . . . .
43 U.S.C. § 666 (2005) (emphasis added). The United States
Supreme Court has characterized the Amendment as “an all-
inclusive statute concerning the adjudication of rights to the
use of water of a river system which in § 666(a)(1) has no
exceptions and which, as we read it, includes appropriative
rights, riparian rights and reserved rights.” United States v.
Dist. Court in and for the County of Eagle, 401 U.S. 520, 524
(1971) (internal quotations omitted). Here the courts are
dealing with “appropriative rights” and competing claims of
ownership, the right to file change applications, and the
competitive claims seeking to capture and use return flow water.
In the language of the Supreme Court, and the Amendment, these
issues relate to “the adjudication of rights to the use of water
of a river system.” Id. (emphasis added). While there are
contract issues that need to be addressed by the federal district
court, there are also important water law issues that will
ultimately need to be addressed by Utah courts.
III. STRAWBERRY’S PETITIONS AND THE UNITED STATES’ RESPONSE
¶27 Strawberry advanced three claims for relief in the
petitions filed in the general adjudications in the Third and
Eighth District Courts. First, it sought a declaration that
Strawberry, for the use and benefit of its shareholders, holds
equitable title to Project water which the shareholders have
applied to beneficial use over approximately the last ninety
years. It claims this ownership extends to the right to
recapture return flows. Second, Strawberry sought a declaration
that the Association and the individual water users have the
right to use the water for purposes of irrigation regardless of
the size of the tract. Finally, Strawberry sought a declaration
that it has the right to file change applications with the State
Engineer without the consent or approval of the United States.
¶28 Strawberry bases its petition before us on Utah water
law. The State Engineer also addresses the issues from the
standpoint of Utah water law but misapplies both statutory
provisions and certain decisions from this court. The United
States makes no attempt to discuss Utah water law, nor does it
undertake to identify any contractual provisions which it claims
to be relevant or to have been violated. The depth of its legal
analysis in the briefing before this court is to point to the
fact that in its petitions in state courts, Strawberry recounted

Nos. 20040270, 20040334 14
the history of the Strawberry Valley Project and the contractual
relationship of these parties. From this the United States
concludes: “Thus the Petitions themselves assert that the water
rights at issue derive from contracts entered into pursuant to
federal reclamation law,” and further, “Strawberry’s rights to
use water derived solely from its contracts with the United
States.” While this assertion is repeated more than once, it is
wholly conclusory and without analytical support.
¶29 The fact that two parties contract with each other to
cooperatively pursue a certificated right to the use of water
belonging to the people of the State of Utah does not lead to the
conclusion that the water rights “derive from contracts” or that
the rights of one derive from its contract with the other. That
is a simplistic surface analysis that disregards the source of
the water rights. The rights of both parties derive from the
State of Utah through their joint effort in following the
appropriation procedure outlined by statute. Simply stated, the
foundation of these water rights is an approved application to
appropriate followed by actual beneficial use on the ground. As
stated in Robinson v. Schoenfeld, 218 P. 1041, 1043 (Utah 1923),
“The sine qua non of making a valid appropriation is and was to
apply the water attempted to be appropriated to some beneficial
use.” The contracts between these parties were designed to
facilitate this process, but they are not the source of the right
to use the water.
¶30 In an effort to understand the substantive legal
position of the United States in this dispute, we have been
compelled to examine not only its limited response here, but the
more extensive disclosures in its counterclaim in the federal
district court, attached as an addendum to its brief. As set
forth in its counterclaim, the United States asserts that it “is
the owner in fee of the Strawberry Valley Project facilities and
the record title owner of the Strawberry Valley Project water
rights” and that “it was . . . the intent of congress that these
project water rights remain permanently in federal control.” In
support of this claim, the United States cites 43 U.S.C. §§ 383,
498. Neither of these sections supports the claim with respect
to water rights as opposed to project facilities, nor does
applicable case law. See Nevada, 463 U.S. at 125-27 (citing
Ickes v. Fox, 300 U.S. 82, 94-95 (1937)). These decisions stand
for the proposition that “the water-rights became the property of
the land owners, wholly distinct from the property of the
government in the irrigation works.” Nevada at 125; Ickes at 95.
¶31 The United States proceeds to repeat its claims that
“[t]he Association’s right to the use of the project facilities
and water from the federally owned SVP water rights were solely

15 Nos. 20040270, 20040334
and totally contractual from their inception.” There is nothing
new in this, but there is in that which follows. The United
States then asserts that when the Association entered into the
1991 Operating Agreement, it “did not retain their [sic]
contractual interests in Strawberry Valley Project water rights
as provided under the 1926, 1928 and 1940 contracts, but instead
gave them up in return for a contractual interest in a guaranteed
water supply.” Perhaps most revealing and germane to the
jurisdiction inquiry is the allegation with respect to return
flows. The United States asserts:
The right to use return flows within the SVP
service area was given to the Highline Canal
Company through a contract with the United
States. The Association has not used them in
the nearly 100 years of the SVP’s existence
and still cannot recapture them within the
boundaries of the SVP. Under state law,
since the return flows result from a
transbasin diversion the United States may
track and reuse the return flows . . . . The
Association gave up its right to the
Strawberry Valley Project water rights in the
1991 Agreement and therefore has no claim to
return flows, which derive from the initial
water rights.
(Emphasis added.)
¶32 The foregoing reveals why the underlying facts of this
case do not lend themselves to a determination that jurisdiction
rests in but one place, state or federal. The 1991 Operating
Agreement is not before us, nor are the earlier agreements of
1926, 1928, and 1940. Under 43 U.S.C. § 390uu (2005), it is the
prerogative of the federal district court to examine the
contractual relationship and “to adjudicate, confirm, validate,
or decree the contractual rights . . . regarding any contract
executed pursuant to Federal reclamation law.” (Emphasis added.)
Separate and apart from this prerogative is the prerogative of
Utah courts to determine how the contractual relationship plays
out under Utah water law. That law cannot be changed by
contract. We reiterate that the Secretary of the Interior in
carrying out the provisions of the Reclamation Act is obliged to
“proceed in conformity with [state] laws . . . relating to the
control, appropriation, use, or distribution of water.” 43
U.S.C. § 383 (emphasis added). Further, we note and underscore
that the United States presumes more than it should when it

Nos. 20040270, 20040334 16
undertakes to articulate Utah law regarding return flows from a
transbasin diversion.
¶33 We cannot here resolve all the competing claims,
including the ultimate issues regarding return flow, which we
envision will come to us at a future time. Accordingly, we
tailor our discussion to correction of misstatements of Utah
water law advanced in the briefs and to identification and
examination of the underlying substantive issues sufficient to
determine whether and to what extent jurisdiction rests in state
or federal court. The difficulty of the task and the
demonstrated uncertainty of the parties has compelled us to move
beyond a surface analysis. We look first at the so-called
“ownership” issue and the certificate of appropriation.
IV. WATER OWNERSHIP IN UTAH
A. A Use-Based Concept
¶34 In navigating a course through Utah water law, it is
easy to be misled by the word “ownership.” In some respects it
is a misnomer. It is only the right to use water that is subject
to ownership. The first and over-arching principle of Utah water
law is this: “All waters in this state, whether above or under
the ground, are hereby declared to be the property of the public,
subject to all existing rights to the use thereof.” Utah Code
Ann. § 73-1-1 (2004) (emphasis added). Of equal importance is
the second fundamental principle: “Beneficial use shall be the
basis, the measure and the limit of all rights to the use of the
water in this state.” Id. § 73-1-3 (emphasis added). Throughout
its history, this court has uniformly recognized that title to
“public water is not subject to private acquisition . . . even by
the federal government or the state itself.” See, e.g., Adams v.
Portage Irrigation, Reservoir & Power Co., 72 P.2d 648, 652-53
(Utah 1937). The State, acting as trustee rather than owner, has
assumed the responsibility of allocating the use of the water for
the benefit and welfare of all the people. J.J.N.P. Co. v.
State, 655 P.2d 1133, 1136 (Utah 1982).
¶35 Notwithstanding these clear and controlling directives,
the “ownership” label continues to be part of the vernacular of
Utah water law. However, the word has varying meanings and
applications that lack the breadth and finality that “ownership”
suggests in other contexts. As held in United States v. District
Court of Fourth Judicial District in and for Utah County, 238
P.2d 1132, 1134 (Utah 1951):

17 Nos. 20040270, 20040334
The right to the use of water, although a
property right, is very different from the
ownership of specific property which is
subject to possession, control and use as the
property owner sees fit. Such right does not
involve the ownership of a specific body of
water but is only a right to use a given
amount of the transitory waters of a stream
or water source for a specific time, place
and purpose . . . .
(Emphasis added.) Accordingly, it is not sufficient to ask only
who has title to water or in whose name a certificate of
appropriation has been issued. The governing statute, Utah Code
Ann. § 73-3-17, affords the certificate of appropriation only the
status of “prima facie evidence of the owner’s right to the use
of the water.” (Emphasis added.) Here it is undisputed that the
right of use rests with Strawberry.
B. Ownership as a Protective Role
¶36 The State Engineer draws this court’s attention to two
decisions where entitlement to file change applications was tied
to the holder of the certificate of appropriation. The two
decisions are East Jordan Irrigation Co. v. Morgan, 860 P.2d 310
(Utah 1993), and Badger v. Brooklyn Canal Co., 922 P.2d 745 (Utah
1996). Each case illustrates the importance of asking not only
the “title” or “ownership” question, but also the second
question, which probes roots, purposes, and entitlements. East
Jordan and Brooklyn Canal support the concept that a mutual water
company as the owner of record of the collective rights of its
shareholders is alone empowered to file change applications. But
ownership for this purpose is not in derogation of the rights and
entitlements of the shareholders who are the ultimate users, it
is rather for their benefit. “The agreement between East Jordan
and its shareholders imposes the duty on the association to
manage its affairs in the interest of its shareholders as a
whole.” 860 P.2d at 314 (emphasis added). It is a form of
ownership akin to that of a trustee. The court offered a
succinct justification for the result reached:
We base this decision on the statutory scheme
governing the appropriation of public waters,
the principles of corporate law bearing on
the function and power of boards of directors
to manage corporate affairs in the interest
of shareholders as a whole, and the dictates
of sound public policy.

10 East Jordan prompted a strong dissent in favor of
individual users. The majority adopted a pragmatic approach that
places the administrative and management burden on the water
company while mandating protection of all users. Specifically,
East Jordan recognizes the right of an individual shareholder to
judicially challenge the “appropriateness of board policy
regarding change applications and the regulation of the
shareholder’s rights.” 860 P.2d at 316. Brooklyn Canal and
Syrett are in accord. Moreover, the legislature has now adopted
a statutory procedure governing change applications sought by
individual shareholders. See Utah Code Ann. § 73-3-3.5.
Nos. 20040270, 20040334 18
Id. at 312 (emphasis added); see also Syrett v. Tropic & East
Fork Irrigation Co., 89 P.2d 474 (Utah 1939) (holding that an
irrigation company stands as a single appropriator with a duty to
protect the rights of its stockholders).
¶37 The State Engineer cites East Jordan and Brooklyn Canal
as potentially empowering the United States to emasculate rather
than protect the rights of the ultimate beneficial users.
Nothing in either decision will support an ownership status other
than a protective role on behalf of the rank-and-file persons who
have applied the water to beneficial use. In the final analysis,
the principal thrust of East Jordan and Brooklyn Canal is not to
undermine the importance of beneficial use, but rather to shift
the protective focus from the individual shareholder to the
shareholders as a collective whole.10 The effort to use these
decisions as a sword against, rather than as a shield in
protection of, the collective whole of the individual users is
completely untenable. The only way the United States (or the
State Engineer in behalf of the United States) could rely upon
these cases would be to acknowledge that the United States stands
in the same shoes worn by the mutual irrigation companies and
that it holds title for the benefit of the ultimate users, and
for no other purpose, a role it must share with the Strawberry
Water Companies.
¶38 Casting the United States in a protective role for the
benefit of the ultimate users is the approach embraced by the
United States Supreme Court in Nevada v. United States, 463 U.S.
110 (1983). In that case, the Bureau of Reclamation sought to
reduce the entitlement of irrigators to project water in order to
provide additional water to an Indian tribe to whom the
Department of the Interior owed a fiduciary duty. The Bureau
claimed that as the title holder of the water rights it could
alter the allocation of project water. In rejecting this
position, the Supreme Court stated:

19 Nos. 20040270, 20040334
[T]he Government is completely mistaken if it
believes the water rights confirmed to it
. . . were like so many bushels of wheat, to
be bartered, sold, or shifted about as the
Government might see fit. Once . . . lands
were acquired by settlers in the Project, the
Government’s “ownership” of the water rights
was at most nominal; the beneficial interest
in the rights confirmed to the Government
resided in the owners of the land . . . to
which these rights became appurtenant upon
application of the Project water to the land.
463 U.S. at 126 (emphasis added). The Court chided the
government for wholly ignoring “the [protective] obligations that
necessarily devolve upon it from having mere title to water
rights . . . when the beneficial ownership of these water rights
resides elsewhere.” Id. at 127 (emphasis added).
C. Terminable Vis-a-Vis Permanent Right of Use
¶39 In his effort to support the position of the United
States, the State Engineer also relies on this court’s decision
in Prisbrey v. Bloomington Water Co., 2003 UT 56, 82 P.3d 1119.
Prisbrey involves a set of facts so completely foreign to the
facts in this case that its only value is by way of contrast. In
Prisbrey, the owner/lessor of a water right filed a change
application at the request of its lessee. After the change
application was duly noticed and granted by the State Engineer, a
neighboring landowner (one Prisbrey) who had not filed a protest
or participated in the administrative proceedings, filed a
petition for judicial review. Among other rejected arguments,
Prisbrey claimed that the published notice of the change
application was invalid because it listed the owner/lessor of the
water right rather than the lessee. Prisbrey argued that the
lessee was the proper party to advance the change application
under section 73-3-3(2)(a) because it was then using the water.
The argument was rejected, first, for the reason that the lessee
was not an appropriator under the law and, second, on the solid
foundation that a lessee “owns only a terminable possessory
interest in the water rights” and that “it would be illogical to
permit [the lessee] to make a permanent change in the point of
diversion, place of use, or purpose for use.” Id. at 1124.
¶40 Prisbrey is not helpful to the position of the United
States. To the contrary, we find it helpful to the position
advanced by the Strawberry Water Users, who are not lessees with
“terminable possessory interests.” Rather, they were joint

Nos. 20040270, 20040334 20
participants in the appropriation process and are the owners of
the exclusive right to use the subject project water in
perpetuity. Though not clearly spelled out in Prisbrey, use and
ownership were merged in that case. The owner/lessor filed the
change application at the behest of the lessee. Use by the
lessee would be deemed use by the lessor in that context. This
court takes the opportunity to clarify that Prisbrey should not
be read as undermining the importance of use as a basis for
filing a change application under Utah’s statutory scheme.
D. Authorization for Filing Change Applications
¶41 Permanent or temporary changes in the point of
diversion or purpose of use is governed by Utah law. Utah Code
section 73-3-3 outlines a careful procedure for the filing and
approval process. The qualification for filing relevant to our
inquiry is stated as follows:
(2)(a) any person entitled to the use of
water may make permanent or temporary changes
in the:
(i) place of diversion;
(ii) place of use; or
(iii) purpose of use for which the water
was originally appropriated.
Utah Code Ann. § 73-3-3(2)(a)(i)-(iii) (1989 & Supp. 2005)
(emphasis added).
¶42 As heretofore noted, East Jordan and Brooklyn Canal
have construed this statutory provision in favor of a mutual
irrigation company as opposed to an individual shareholder. Here
the relationship is three-layered: the United States, the
Strawberry companies, and the shareholders. The Strawberry
companies represent the collective use of all their shareholders.
They owe these shareholders a fiduciary duty and have a
responsibility to manage for the common good. The concern in
East Jordan and Brooklyn Canal that one shareholder would pursue
a course at variance with the interests of the other shareholders
is nonexistent in this case. The risk here is that the United
States as holder of the certificate would seek to pursue a course
at variance with the Strawberry companies and their shareholders,
whose interests are aligned. Such a course would be contrary to

11 We do not foreclose the possibility that in the proper
circumstance the United States should be allowed to file the
change application. In addition to “entitlement to the use of
water” as a qualifying basis, Utah’s statute empowers the holder
of an “approved application for the appropriation of water” to
file. Utah Code Ann. § 73-3-3(8)(a). Here the “approved
application” matured into a “certificate of appropriation,” but
the right of use became separated from the holder of the
certificate. The statute does not have a separate provision for
the holder of the certificate. We need not determine how these
provisions should be applied to the United States in its role in
this case since it is only the right to file belonging to the
actual users (Strawberry) that has been challenged.
21 Nos. 20040270, 20040334
the cited decisions and to the protective role recognized in
Nevada, 463 U.S. at 126-27.
¶43 The considerations in East Jordan and Brooklyn Canal
which led to the decisions favoring the mutual irrigation
companies do not favor the United States. These same
considerations favor continued recognition of the right of the
mutual irrigation companies to make change application decisions
for the benefit of the collective whole of the shareholders whom
they represent and who, through their votes, control the boards
of directors. The United States, on the other hand, is a
stranger to the day-by-day beneficial use and lacks a direct
equation with the actual users. Moreover, even if the United
States were entitled to file the applications, it could not do so
in derogation of the rights and entitlements of the ultimate
users in whose interest it is obliged to act. Failure to protect
this interest would violate the principles established in
Nevada.11
¶44 Having corrected the misreading of our statutory and
case law regarding “ownership” and the filing of change
applications, we turn now to the claim that provisions in the
contract(s) between these parties require the Secretary of the
Interior’s approval of any change in place or purpose of use.
V. DEFERRAL TO FEDERAL DISTRICT COURT
¶45 In its federal court counterclaim, the United States
advances the position that “[t]he federal government retains the
ultimate approval authority with respect to both the distribution
of project water and any change of place or purpose of use that
might be contemplated.” It claims that this is mandated both by
the contract between the parties and by federal statutes. It
further claims that as the “title owner of record” it alone has

Nos. 20040270, 20040334 22
the authority to file a change application with the State
Engineer.
¶46 We have addressed the latter argument, but must now
defer to the federal court for construction of the federal
statutes as well as the contracts between the parties. We note,
however, that the position advanced by the United States
seriously calls into question the primacy of state water law
guaranteed by Section 8 of the Reclamation Act. Notwithstanding
the over-arching importance of this issue, any further response
by Utah courts must await the federal court review.
¶47 We also take note of the claim by the United States
that if Strawberry is allowed to change the place or purpose of
use of Project water without Secretary approval, it will threaten
the “integrity” and “viability” of the entire project as well as
the Central Utah Project. Such a claim, if adequately supported,
would be extremely compelling in either federal or state court or
before the Utah State Engineer, whose responsibility it is to
evaluate change applications. The threat posed by irrigating
lawns and gardens and other small tracts whose combined
consumptive use does not exceed that of the larger tract of which
they are a part is not apparent to us, but could be readily
evaluated by the State Engineer. The right to file change
applications neither ends the inquiry nor guarantees approval.
Each change application must stand on its own merit. Quite
clearly, any real compromise of the ability of the project to
survive or properly function would give great pause to any
responsible official or tribunal.
VI. THE CLAIMS TO RETURN FLOW FROM IMPORTED WATER
¶48 We come at last to the competing claims to return flow
water. This does not appear to be a change application issue,
but a dispute about which party, if either, can extend control
beyond the initial use made by Strawberry. It ventures into
uncharted territory. The ambitious applications to, in essence,
reappropriate Project water give rise to three interrelated
questions that we discuss not for the purpose of resolution, but
for the purpose of examining the jurisdiction in which they
ultimately should be decided. The three questions may be stated
as follows: First, can either party follow Project water beyond
the current user’s (Strawberry’s) reach and then subsequently
recapture it? Second, can the United States, enjoying no right
of use to the Project water in Utah Valley, gain a superior right
to the use of that water once it becomes return flow? And third,
does the inquiry necessarily move beyond these parties, thereby
implicating matters suitable for a general adjudication?

12 Without any discussion or analysis, and in a rather
obscure manner, the State Engineer seems to accept the notion
that imported water can never be subject to appropriation by
others in the import basin, citing Tanner v. Bacon, 136 P.2d 957
(Utah 1943). The Tanner decision is briefly discussed hereafter.
See infra ¶ 58.
23 Nos. 20040270, 20040334
¶49 These questions are complicated by the fact that they
arise in the context of water imported to the Great Basin from
the Colorado River drainage. This importation augments the
supply of water available for beneficial use in both Utah Valley
and the Salt Lake Valley. In the absence of reliance on this
fact and the apparent cooperation of the State Engineer,12 it is
difficult to understand how these parties could seek to recapture
virtually the entire quantity, in acre-feet, of the imported
water.
A. Recapturing Return Flow
¶50 Under ordinary circumstances, the original appropriator
can use and reuse the water so long as it is within the
appropriator’s control. Estate of Steed v. New Escalante
Irrigation Co., 846 P.2d 1223, 1225 (Utah 1992). But once the
water has passed to the land of another and out of the control of
the user, it is subject to recapture and appropriation by others.
Smithfield W. Bench Irrigation Co. v. Union Cent. Life Ins. Co.,
142 P.2d 866, 868 (Utah 1943). The law “makes no distinction
between previously appropriated waste waters which are beyond the
control of the original appropriator and the flow of natural
streams, and under [the statutory provisions] all . . . are
subject to appropriation.” McNaughton v. Eaton, 242 P.2d 570,
574 (Utah 1952). Further:
Water permitted to escape after it has been
appropriated by one, and which finds its way
into the natural channel of a stream from
which it was taken or into the channel of
another stream cannot be reclaimed by the
original appropriator against subsequent
appropriators (users) who have made use of
it.
Wrathall v. Johnson, 40 P.2d 755, 766 (Utah 1935) (citation
omitted) (emphasis added). These principles were specifically
applied to return flow water in the underground basin in the case
of Stubbs v. Ercanbrack, 368 P.2d 461, 464 (Utah 1962), to wit:

Nos. 20040270, 20040334 24
But after the irrigation water is used and
becomes commingled with the waters in the
natural water table it has lost its identity
as irrigation water and is no longer owned by
the [irrigators] as such. Such waters in the
natural water table are and always have been
subject to appropriation.
(Emphasis added.) It seems elementary that Utah courts must
determine how these well-established principles should be applied
to imported water.
B. Right to Recapture Without Prior Right of Use
¶51 The United States has not applied the water to the land
covered by the certificates of appropriation. The general rule
in the western states that beneficial use is the basis, the
measure, and the limit of the right to use water for irrigation
is given expression in the Reclamation Act. Imperial Water Co.
No. 5 v. Holabird, 197 F. 4, 12 (9th Cir. 1912). The language of
the Act provides: “The right to the use of water acquired under
the provisions of this Act shall be appurtenant to the land
irrigated, and beneficial use shall be the basis, the measure,
and the limit of the right.” 43 U.S.C. § 372 (2005). The
certificates of appropriation stand in the name of the United
States; however, in the absence of beneficial use by the
Strawberry Water Users, these would be nothing more than empty
vessels. Moreover, under the terms of the Act as well as the
patents issued, the water rights are appurtenant to the lands
described in the certificates. These lands have been owned and
occupied by the Strawberry Water Users at all relevant times.
¶52 By some yet unarticulated theory, the United States
seeks to recapture the return flow from water beneficially used
by the Strawberry Water Users on their lands, the United States
being a complete stranger to both the lands and the water since
delivery of the latter to these users at a far distant point high
in the watershed. Presumably, the United States places complete
reliance upon the assumption that imported water should be
afforded special treatment unlike all other water belonging to
the public and that it, as opposed to the Strawberry Water Users,
should be the beneficiary of that special treatment. Quite
clearly, this involves major policy issues “relating to the
control, appropriation, use or distribution of water” and is
therefore governed by state water law under the express language
of Section 8 of the Reclamation Act. 43 U.S.C. § 383 (2005)
(emphasis added). Utah courts will have to grapple with these
issues.

13 Dugan v. Rank, 372 U.S. 609 (1963), involved an action
for injunctive relief to prevent the United States from
impoundment of water that allegedly interfered with the rights of
downstream users. The court determined that it was a private
dispute potentially involving a partial taking of water rights
giving rise to claims for compensation.
25 Nos. 20040270, 20040334
C. Addressing the Issues in a General Adjudication
¶53 Under the McCarran Amendment, the United States is
subject to Utah’s general adjudication statute. It is codified
at Utah Code Ann. §§ 73-4-1 through -24 (2004). The Act provides
for the general adjudication of the rights of various claimants
to the waters of a particular stream or water source. The final
section of the Act, § 73-4-24 (hereafter “Section 24”), provides
in relevant part as follows:
If, during the pendency of a general
adjudication suit, there shall be a dispute
involving the water rights of less than all
of the parties to such suit, any interested
party may petition the district court in
which the general adjudication suit is
pending to hear and determine said dispute
. . . . Thereafter the court may hear and
determine the dispute and may enter an
interlocutory order to control the rights of
the parties . . . until the final decree in
the general adjudication suit is entered.
¶54 The United States argues that this is purely a “private
dispute” and therefore not properly part of a general
adjudication to which the United States has waived sovereign
immunity. It relies on Dugan v. Rank, 372 U.S. 609 (1963), for
the proposition that the only actions that can be considered as
seeking an “adjudication of rights to the use of water of a river
system or other source” under the McCarran Amendment are those
“involving a general adjudication of all of the rights of various
owners on a given stream.” Id. at 618 (internal quotations
omitted).
¶55 We find no violation of the principles stated in Dugan,
which arose in a much different context than is present here.13
Section 24 authorizes this court to “hear and determine” the
dispute of these parties as part of the “general adjudication
suit.” Section 24 represents a simple and common-sense
recognition that there may be some disputes involving the water

14 There may be some motivation for these parties to
characterize this as a “private dispute,” thereby eliminating all
outside competition for return flow from imported water. The
issues and impacts are simply too expansive to allow this.
15 This acknowledges a loss of some 19.4% of the acre-
footage. If the pattern persisted, the next round would begin at
(continued...)
Nos. 20040270, 20040334 26
rights of fewer than all of the parties in a water basin, thereby
justifying an early hearing and entry of an interlocutory decree
short of the final decree in the general adjudication. This
serves the “objective of providing . . . a reasonably prompt
resolution of the issues raised in [the] section 24 petition.”
Murdock v. Springville Mun. Corp., 878 P.2d 1147, 1150 (Utah
1994). This objective is a key factor favoring exercise of
discretion to allow the action to proceed. Id.
¶56 The United States Supreme Court has approved an
adjudication process somewhat similar to that contemplated by
Section 24. See United States v. Dist. Court in and for Water
Dist. No. 5, 401 U.S. 527 (1971); United States v. Dist. Court in
and for the County of Eagle, 401 U.S. 520 (1971). In these
decisions, the Supreme Court upheld the McCarran Amendment waiver
of immunity even though the adjudication process proceeded step
by step and, at times, focused only on the water rights of
particular claimants. Such a process, which eventually involves
the entire community of claims, is quite essential for such a
massive undertaking.
¶57 The State Engineer also points out that a general
adjudication should not be employed to resolve a purely “private
dispute” even if water rights are involved. The concept is
sound, but the examples given and the cases cited are not akin to
the facts and circumstances of this case. To suggest that this
is a private dispute whose impact begins and ends with these
parties is to turn a blind eye to the obvious. It potentially
reverberates all the way from southern Utah Valley north to where
the Jordan River enters the Great Salt Lake.14 If the imported
water is protected from appropriation by others even after its
identity has been lost and it is commingled with other waters in
the underground basin or in natural water courses or bodies, then
what is to prevent the present effort from being repeated until
the water is either lost to evaporation or moves beyond the
possibility of recapture? The competitive applications filed by
these parties are very ambitious. Of the 61,000 acre-feet which
it guarantees to deliver annually to the Strawberry Water
Companies, the United States proposes to recapture 49,200 acre-
feet for storage in Utah Lake and use in Salt Lake County.15 The

15 (...continued)
approximately 39,680 acre-feet. The Strawberry Water Companies
do not address the issue of loss.
27 Nos. 20040270, 20040334
Strawberry Water Companies propose to recapture all return flow
from 64,400 acre-feet for use in southern Utah Valley.
¶58 It is universally understood that the public waters of
this state are appropriated and used high in the various
watersheds only to become return flow for appropriations anew
over and over again until the residue finally passes beyond any
possible diversion for beneficial use. It is all the same water.
In the absence of special treatment for imported water, the
claims of these parties seem difficult to defend. Whether or to
what extent imported water is entitled to different treatment
does not appear to have been squarely addressed by this court.
It surfaced in an oblique manner in Tanner v. Bacon, 136 P.2d 957
(Utah 1943), to which the State Engineer has softly drawn our
attention. As here, Tanner dealt, at least in part, with water
developed pursuant to a reclamation project (Deer Creek Project);
but the United States and the Provo River Water Users’
Association (who stood in the same position as the Strawberry
Water Users stand here) were on the same side. Both opposed the
application of the plaintiff to appropriate waters of the Provo
River for power generation purposes. In this context, the
plaintiff made a concession in relation to the imported water:
[The plaintiff] concedes that he can acquire
no rights under his application to the use of
the waters which may be brought from the
Weber and Duchesne river systems. Such
waters having been appropriated and reduced
to possession and ceased to be public waters
and are not subject to appropriation.
136 P.2d at 960.
¶59 Neither the district court nor this court reinforced
the distinction drawn or the concession made by the plaintiff.
Rather they held that the plaintiff’s approved application was
subordinate and inferior to the “prior rights” of the United
States and the Provo River Water Users’ Association in “the
waters of the Provo River and its tributaries, and the waters of
the Weber and Duchesne rivers and their tributaries in connection
with the Deer Creek reclamation project.” Id. at 961. In the
sixty-plus years since it was decided, there are no subsequent
cases which cite Tanner for the proposition that imported water
is entitled to special treatment. That is a subject that will

Nos. 20040270, 20040334 28
deserve full briefing and careful consideration at the
appropriate time, which is not now. The sole purpose in citing
and briefly discussing Tanner is to reveal that an effort to
afford different treatment for imported water is not entirely
novel, that it potentially involves rights and interests on a
much broader scale than the interests of these litigants, and
that it necessarily implicates fundamental issues of Utah water
law properly addressed to Utah courts in the context of a general
adjudication.
VII. VENUE
¶60 It is clear that the United States is a party to the
general adjudication action in the Third District Court pending
since 1936. There is a dispute as to whether it is a party in
the Eighth District. This may be of limited consequence since
there is no dispute between these parties about the diversion and
use of water within the Uintah Basin drainage. They are in
agreement that the waters in question have been properly diverted
and captured in the Strawberry Reservoir and properly delivered
through the diversion tunnel into the Utah Lake–Jordan River
drainage for beneficial use by the Strawberry Water Companies and
their shareholders. The basic diversion decision was made some
100 years ago and will remain entirely unchanged by the outcome
of the current dispute. All impacts and implications of this
dispute appear to be limited to the Utah Lake–Jordan River
drainage. The State Engineer has issued a memorandum decision
giving conditional approval of applications for both parties
subject to a judicial determination establishing who has the
right to proceed with such applications. There is no apparent
reason to suppose that the resolution of this dispute in the
Third District action will have any impact on the general
adjudication in the Uintah Basin.
CONCLUSION
¶61 Jurisdiction rests in the federal district court to
“adjudicate, confirm, validate or decree . . . contractual
rights.” 43 U.S.C. § 390uu . Jurisdiction rests in state
district court as to issues dealing with the “control,
appropriation, use or distribution of water,” 43 U.S.C. § 383
(emphasis added), and “adjudication of the right to use of water
of a river system.” 43 U.S.C. § 666 (emphasis added). The
United States has consented to joinder in both courts. In Utah,
“ownership” of water rights is equated with “right of use,” and
title can be held in a protective capacity for those who have
that right. The water rights dispute of these parties is
appropriate for resolution under Utah’s general adjudication

29 Nos. 20040270, 20040334
statute of which Section 24 is an integral part. It has been
properly invoked by the Strawberry Water Users. This is not just
a “private dispute,” but potentially impacts many downstream
appropriators and involves important water law issues of first
impression. The dispute centers in the Utah Lake–Jordan River
drainage.
¶62 We remand to Eighth District Court, directing that it
stay further proceedings pending the outcome in Third District
Court and in federal district court. We remand to Third District
Court for further proceedings consistent with this opinion. The
parties need to evaluate what questions they want answered in
light of our ruling and to press those issues in the proper
jurisdiction. If the parties dispute the manner in which the
contracts between them should be construed, and their rights
thereunder, then Third District Court is directed to defer to
federal district court. Once the contractual provisions are made
clear, Third District Court should determine the manner in which
they should be recognized, treated, or applied under Utah water
law. We further direct Third District Court to work in a
cooperative manner with federal district court so as to
facilitate each court hearing and resolving the matters which are
peculiarly within its jurisdictional province.
---
¶63 Chief Justice Durham and Justice Nehring concur in
Judge McIff’s opinion.
¶64 Having disqualified herself, Justice Parrish does not
participate herein; District Judge K. L. McIff sat.
---
DURRANT, Justice, concurring and dissenting:
¶65 I fully concur in all aspects of the majority opinion,
except for the section entitled “The Claims to Return Flow from
Imported Water.” As to that section, I concur in part and
dissent in part.
¶66 I agree with the majority that the return flow issue is
governed by state law and is appropriately resolved by state
courts. See supra ¶¶ 50, 52, 59. I am unwilling, however, to
join with the majority in anticipating how the issue will
ultimately be resolved by this court.

Nos. 20040270, 20040334 30
¶67 I recognize that the majority does not purport to
resolve the parties’ return flow claims, but rather, provides
analytical guidance. That guidance is, however, at a minimum,
suggestive of what this court’s ultimate resolution of the claims
would be. This is a step I am unwilling to take at this
juncture.
¶68 My unwillingness is founded not upon any disagreement
with the substance of the guidance provided by the majority, but
upon the fact that the parties’ return flow claims are not now
before us, and we have therefore not had the benefit of full
briefing on the issues raised by these claims. I would wait
until the return flow issue is squarely before this court and has
been appropriately briefed before attempting to determine how it
should be resolved.
---
¶69 Associate Chief Justice Wilkins concurs in Justice
Durrant’s concurring and dissenting opinion.