CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT.
Rehnquist, J., delivered the opinion for a unanimous Court. Brennan, J., filed a concurring opinion, post, p. 145.
JUSTICE REHNQUIST delivered the opinion of the Court.
In 1913 the United States sued to adjudicate water rights to the Truckee River for the benefit of the Pyramid Lake Indian Reservation and the planned Newlands Reclamation Project. Thirty-one years later, in 1944, the United States District Court for the District of Nevada entered a final decree in the case pursuant to a settlement agreement. In 1973 the United States filed the present action in the same court on behalf of the Pyramid Lake Indian Reservation, seeking additional water rights to the Truckee River. The issue thus presented is whether the Government may partially undo the 1944 decree, or whether principles of res judicata prevent it, and the intervenor Pyramid Lake Paiute Tribe, from litigating this claim on the merits.
Nevada has, on the average, less precipitation than any other State in the Union. Except for drainage in the southeastern part of the State into the Colorado River, and drainage in the northern part of the State into the Columbia River, the rivers that flow in Nevada generally disappear into "sinks." Department of Agriculture Yearbook, Climate and Man (1941). The present litigation relates to water rights in the Truckee River, one of the three principal rivers flowing through west central Nevada. It rises in the High Sierra in Placer County, Cal., flows into and out of Lake Tahoe, and thence down the eastern slope of the Sierra Nevada mountains. It flows through Reno, Nev., and after a course of some 120 miles debouches into Pyramid Lake, which has no outlet.
It has been said that Pyramid Lake is "widely considered the most beautiful desert lake in North America [and that its] fishery [has] brought it worldwide fame. A species of cutthroat trout . . . grew to world record size in the desert lake and attracted anglers from throughout the world." S. Wheeler, The Desert Lake 90-92 (1967). The first recorded sighting of Pyramid Lake by non-Indians occurred in January 1844 when Captain John C. Fremont and his party camped nearby. In his journal Captain Fremont reported that the lake "broke upon our eyes like the ocean" and was "set like a gem in the mountains." 1 The Expeditions of John Charles Fremont 604-605 (D. Jackson & M. Spence eds. 1970). Commenting upon the fishery, as well as the Pyramid Lake Indians that his party was camping with, Captain Fremont wrote:
"An Indian brought in a large fish to trade, which we had the inexpressible satisfaction to find was a salmon trout; we gathered round him eagerly. The Indians were amused with our delight, and immediately brought in numbers; so that the camp was soon stocked. Their flavor was excellent -- superior, in fact, to that of any fish I
have ever known. They were of extraordinary size -- about as large as the Columbia river salmon -- generally from two to four feet in length." Id., at 609.
When first viewed by Captain Fremont in early 1844, Pyramid Lake was some 50 miles long and 12 miles wide. Since that time the surface area of the lake has been reduced by about 20,000 acres.
The origins of the cases before us are found in two historical events involving the Federal Government in this part of the country. First, in 1859 the Department of the Interior set aside nearly half a million acres in what is now western Nevada as a reservation for the area's Paiute Indians. In 1874 President Ulysses S. Grant by Executive Order confirmed the withdrawal as the Pyramid Lake Indian Reservation. The Reservation includes Pyramid Lake, the land surrounding it, the lower reaches of the Truckee River, and the bottom land alongside the lower Truckee.
Then, with the passage of the Reclamation Act of 1902, 32 Stat. 388, the Federal Government was designated to play a more prominent role in the development of the West. That Act directed the Secretary of the Interior to withdraw from public entry arid lands in specified Western States, reclaim the lands through irrigation projects, and then to restore the lands to entry pursuant to the homestead laws and certain conditions imposed by the Act itself. Accordingly, the Secretary withdrew from the public domain approximately 200,000 acres in western Nevada, which ultimately became the Newlands Reclamation Project. The Project was designed to irrigate a substantial area in the vicinity of Fallon, Nev., with waters from both the Truckee and the Carson Rivers.
The Carson River, like the Truckee, rises on the eastern slope of the High Sierra in Alpine County, Cal., and flows north and northeast over a course of about 170 miles, finally disappearing into Carson sink. The Newlands Project accomplished the diversion of water from the Truckee River to
the Carson River by constructing the Derby Diversion Dam on the Truckee River, and constructing the Truckee Canal through which the diverted waters would be transported to the Carson River. Experience in the early days of the Project indicated the necessity of a storage reservoir on the Carson River, and accordingly Lahontan Dam was constructed and Lahontan Reservoir behind that dam was created. The combined waters of the Truckee and Carson Rivers impounded in Lahontan Reservoir are distributed for irrigation and related uses on downstream lands by means of lateral canals within the Newlands Reclamation Project.
Before the works contemplated by the Project went into operation, a number of private landowners had established rights to water in the Truckee River under Nevada law. The Government also asserted on behalf of the Indians of the Pyramid Lake Indian Reservation a reserved right under the so-called "implied-reservation-of-water" doctrine set forth in Winters v. United States, 207 U.S. 564 (1908).*fn1 The United States therefore filed a complaint in the United States District Court for the District of Nevada in March 1913, commencing what became known as the Orr Ditch litigation. The Government, for the benefit of both the Project and the Pyramid Lake Reservation, asserted a claim to 10,000 cubic feet of water per second for the Project and a claim to 500 cubic feet per second for the Reservation. The complaint named as defendants all water users on the Truckee River in Nevada. The Government expressly sought a final decree quieting title to the rights of all parties.
Following several years of hearings, a Special Master issued a report and proposed decree in July 1924. The report awarded the Reservation an 1859 priority date in the Truckee River for 58.7 second-feet and 12,412 acre-feet annually of water to irrigate 3,130 acres of Reservation lands.*fn2 The Project was awarded a 1902 priority date for 1,500 cubic feet per second to irrigate, to the extent the amount would allow,*fn3 232,800 acres of land within the Project. In February 1926 the District Court entered a temporary restraining order declaring the water rights as proposed by the Special Master. "One of the primary purposes" for entering a temporary order was to allow for an experimental period during which modifications of the declared rights could be made if necessary. App. to Pet. for Cert. in No. 81-2245, p. 186a (hereafter Nevada App.).
Not until almost 10 years later, in the midst of a prolonged drought, was interest stimulated in concluding the Orr Ditch litigation. Settlement negotiations were commenced in 1934 by the principal organizational defendants in the case, Washoe County Water Conservation District and the Sierra Pacific Power Co., and the representatives of the
Project and the Reservation. The United States still acted on behalf of the Reservation's interests, but the Project was now under the management of the Truckee-Carson Irrigation District (TCID).*fn4 The defendants and TCID proposed an agreement along the lines of the temporary restraining order. The United States objected, demanding an increase in the Reservation's water rights to allow for the irrigation of an additional 2,745 acres of Reservation land. After some resistance, the Government's demand was accepted and a settlement agreement was signed on July 1, 1935. The District Court entered a final decree adopting the agreement on September 8, 1944.*fn5 No appeal was taken. Thus, 31 years after its inception the Orr Ditch litigation came to a close.
On December 21, 1973, the Government instituted the action below seeking additional rights to the Truckee River for the Pyramid Lake Indian Reservation; the Pyramid Lake Paiute Tribe was permitted to intervene in support of the United States. The Government named as defendants all persons presently claiming water rights to the Truckee River and its tributaries in Nevada. The defendants include the defendants in the Orr Ditch litigation and their successors, approximately 3,800 individual farmers that own land in the Newlands Reclamation Project, and TCID. The District Court certified the Project farmers as a class and directed TCID to represent their interests.*fn6
In its complaint the Government purported not to dispute the rights decreed in the Orr Ditch case. Instead, it alleged that Orr Ditch determined only the Reservation's right to "water for irrigation," Nevada App. 157a, not the claim now being asserted for "sufficient waters of the Truckee River . . . [for] the maintenance and preservation of Pyramid Lake, [and for] the maintenance of the lower reaches of the Truckee River as a natural spawning ground for fish," id., at 155a-156a. The complaint further averred that in establishing the Reservation the United States had intended that the Pyramid Lake fishery be maintained. Since the additional water now being claimed is allegedly necessary for that purpose, the Government alleged that the Executive Order creating the Reservation must have impliedly reserved a right to this water.*fn7
The defendants below asserted res judicata as an affirmative defense, saying that the United States and the Tribe were precluded by the Orr Ditch decree from litigating this claim. Following a separate trial on this issue, the District Court sustained the defense and dismissed the complaint in its entirety.
In its decision, the District Court first determined that all of the parties in this action were parties, or in privity with
parties, in the Orr Ditch case. The District Court then found that the Orr Ditch litigation "was intended by all concerned, lawyers, litigants and judges, as a general all inclusive water adjudication suit which sought to adjudicate all rights and claims in and to the waters of the Truckee . . . and required all parties to fully set up their respective water right claims." Nevada App. 185a. The court determined that in accordance with this general intention, the United States had intended in Orr Ditch "to assert as large a water right as possible for the Indian reservation." Nevada App. 185a. The District Court further explained:
"[The] cause of action sought to be asserted in this proceeding by the plaintiff and the Tribe is the same quiet title cause of action asserted by the plaintiff in Orr Ditch for and on behalf of the Tribe and its members, that is, a Winters implied and reserved water right for the benefit of the reservation, with a priority date of December 8, 1859, from a single source of water supply, i. e., the Truckee Watershed. The plaintiff and the Tribe may not litigate several different types of water use claims, all arising under the Winters doctrine and all derived from the same water source in a piece-meal fashion. There was but one cause of action in equity to quiet title in plaintiff and the Tribe based upon the Winters reserved right theory." Id., at 188a.
The Court of Appeals for the Ninth Circuit affirmed in part and reversed in part. 649 F.2d 1286 (1981), modified, 666 F.2d 351 (1982). The Court of Appeals agreed that the causes of action asserted in Orr Ditch and the instant litigation are the same and that the United States and the Tribe cannot relitigate this cause of action with the Orr Ditch defendants or subsequent appropriators of the Truckee River. But the Court of Appeals found that the Orr Ditch decree did not conclude the dispute between the Tribe and the owners of Newlands Project lands. The court said that litigants are not to be bound by a prior judgment unless they were adversaries
under the earlier pleadings or unless the specific issue in dispute was actually litigated in the earlier case and the court found that neither exception applied here.
The Court of Appeals conceded that "[a] strict adversity requirement does not necessarily fit the realities of water adjudications." 649 F.2d, at 1309. Nevertheless, the court found that since neither the Tribe nor the Project landowners were parties in Orr Ditch but instead were both represented by the United States, and since their interests may have conflicted in that proceeding, the court would not find that the Government had intended to bind these nonparties inter se absent a specific statement of adversity in the pleadings. We granted certiorari in the cases challenging the Court of Appeals' decision, 459 U.S. 904 (1982), and we now affirm in part and reverse in part.
The Government opens the "Summary of Argument" portion of its brief by stating: "The court of appeals has simply permitted a reallocation of the water decreed in Orr Ditch to a single party -- the United States -- from reclamation uses to a Reservation use with an earlier priority. The doctrine of res judicata does not bar a single party from reallocating its water in this fashion . . . ." Brief for United States 21. We are bound to say that the Government's position, if accepted, would do away with half a century of decided case law relating to the Reclamation Act of 1902 and water rights in the public domain of the West.
It is undisputed that the primary purpose of the Government in bringing the Orr Ditch suit in 1913 was to secure water rights for the irrigation of land that would be contained in the Newlands Project, and that the Government was acting under the aegis of the Reclamation Act of 1902 in bringing that action.*fn8 Section 8 of that Act provides:
"That nothing in this Act shall be construed as affecting or intended to affect or to in any way interfere with the laws of any State or Territory relating to the control, appropriation, use, or distribution of water used in irrigation, or any vested right acquired thereunder, and the Secretary of the Interior, in carrying out the provisions of this Act, shall proceed in conformity with such laws, and nothing herein shall in any way affect any right of any State or of the Federal Government or of any landowner, appropriator, or user of water in, to, or from any interstate stream or the waters thereof: Provided, That 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." 32 Stat. 390.
In California v. United States, 438 U.S. 645 (1978), we described in greater detail the history and structure of the Reclamation Act of 1902, and stated:
"The projects would be built on federal land and the actual construction and operation of the projects would be in the hands of the Secretary of the Interior. But the Act clearly provided that state water law would control in the appropriation and ...