The Volokh Conspiracy

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Indian Law

Harriet McConnell Retford on Arizona v. Navajo Nation

"[The decision] showcases the now-familiar contrast between the Court’s two different approaches to conservative jurisprudence: the strict formalism of Justice Gorsuch—a stern insistence that the United States live up to the letter of its legal obligations come hell or high water—as opposed to the status-quo, stare decisis driven conservative jurisprudence of Justice Kavanagh and Chief Justice Roberts."


As I noted in an earlier post, I'm delighted to report that we have two items on this June 2023 Supreme Court case today, both from people who know a great deal about Indian law; unfortunately, I know very little about the subject, but I know it's important, and I'm glad to have a chance to pass along these items. This is from Harriet McConnell Retford, who is a member of the American Indian Law group and Greenberg Traurig LLP and the co-author of an amicus brief in Navajo Nation on behalf of the Coalition of Large Tribes (the views expressed are her own and don't reflect those of Greenberg Traurig or the Coalition):

The Supreme Court's decision in Arizona v. Navajo Nation, No. 21-1484 comes at the messy intersection of two of the least functional doctrines in federal Indian law: reserved water rights under Winters v. United States (1908) and Indian trust doctrine under United States v. Mitchell (1980).

It also showcases the now-familiar contrast between the Court's two different approaches to conservative jurisprudence: the strict formalism of Justice Gorsuch—a stern insistence that the United States live up to the letter of its legal obligations come hell or high water—as opposed to the status-quo, stare decisis driven conservative jurisprudence of Justice Kavanagh and Chief Justice Roberts.

Justice Gorsuch would insist that if the United States serves as "trustee" for the lands and waters of Indian tribes then it has a duty to account for those waters and to make absolutely certain that it does not take any action that would divert those waters to other public or private purposes. The majority instead follows a long line of precedents that allow the United States to assert the privileges of trustee over Indian lands without assuming the corresponding obligations.

To be fair, however, there are significant problems with Arizona v. Navajo Nation as a vehicle for addressing these issues, especially the lack of clarity regarding the remedy being sought, so hopefully further opportunities will come to revisit these doctrines in a cleaner case.

Tribes have water rights in theory, but legal obstacles make the use of these rights prohibitively expensive.

When the United States set aside lands to be reserved as homelands for Indian tribes, it also reserved the water needed to make those lands livable and productive. Winters v. United States (1908). There is no dispute that Indian reservations have a legal right to associated water rights sufficient to build a permanent homeland for their people, and that these water rights apply not only to reservations created by treaty but also to the numerous reservations created by act of Congress or executive order.

The basic problem with reserved water rights is that they are not worth the paper that they are printed on, or rather not printed on. Indian water rights come in three types: unquantified, quantified, and "wet water"—actual water that can be physically delivered. Unquantified water rights are hypothetical water rights to unspecified amount of water and cannot be used until the tribe obtains a legal judgment stating that it has a legal right to specified amount of water from a particular water system.

The process for quantifying water rights is known as a general stream adjudication in which all the claimants to a particular watercourse participate and the court issues a decision determining the amount of water that everyone is entitled to and the priority of their claims in the event that there is not enough water for all rights-holders. Even for minor river systems these cases often drag on for decades, with several stages of multi-week trials and numerous expert witnesses, usually culminating in a settlement that must be approved by act of Congress. Every step of the process is massively contentious, and the legal standard is both vague and appallingly fact-specific.

This complexity is why most tribes have failed to quantify their water rights even a hundred years after Winters was decided. And the mainstream of the Colorado is definitely not a minor river system.

Even if the rights were quantified, they would be largely useless without billions of dollars in infrastructure to treat and transport the water to the places where it is needed. Not only would these pipes and pumps need to be built over some of the most rugged terrain in the United States, but the regulatory compliance requirements and environmental litigation would be prohibitively expensive. The Environmental Impact Statement alone would be thousands of pages long, and you could easily end up putting a dozen consultant and lawyer kids through college for each Indian household that finally gets running water.

Water rights in the western United States are usufructuary—use it or lose it—rights and can only be used, not sold, leased, or deliberately left in the river. Any water that is not physically removed by a senior appropriator is available for appropriation by another user—free of charge. There is no market price for water rights, which leads to the predictable shortages, rationing, and misallocation. This system is enormously economically inefficient and it works a great injustice to Indian tribes that do not have the funds to build giant infrastructure projects and are forced to donate their water to California farmers instead.

The entire system is unworkable and needs to change so that the tribes can make use of the valuable water that is their rightful property. My own policy preference would be some combination of marketability and an effort to develop a legal standard for calculating the acre-feet available to a tribe that is more mathematical and formulistic than the current approach, so that simple cases can disposed of quickly and cheaply. This would allow the tribes to lease their water to the best available use and then use that money to pay for improvements to their water delivery capabilities or for other useful projects.

The Navajo Nation, in its suit, had a different theory for how to address this problem. It believed—not without reason—that the United States as trustee over Indian water rights has an obligation to account for them and, at the very least, prevent them from being diverted to other uses.

The United States needs to honor the basic fiduciary duties of a trustee or get out of the Indian trust business—preferably the latter.

These reserved water rights are property of the United States, held in trust for the Tribes. But the United States is a shockingly incompetent trustee and exerts itself to manage these assets only in a haphazard fashion and in response to political pressure. For example, during the original adjudications of the upper basin of the Colorado, the United States asserted water rights on behalf of six tribes but not only refused to include the Navajo Nation but blocked its efforts to intervene on its own behalf.

The mismanagement by the United States might be tolerable if it did nothing at all, thus making it a "trustee" in name only as the majority held in Arizona v. Navajo Nation, but it is in fact active and interfering. Most water projects in the western United States were built with federal funds, and water remains a major target of pork barrel spending. The BIA is routinely expected to sign off on all major tribal land use decisions, a requirement that predictably adds six months of delay and significant regulatory compliance costs for no discernable benefit. Modern tribes have long since given up relying on the BIA and learned to hire their own legal counsel.

The majority is disingenuous about this point, claiming that the Navajo Nation is demanding that "the United States must do more than simply not interfere with the reserved water rights." Slip. op. at 6 (emphasis in original). The United States interferes heavily and constantly; half the expense of these water projects is the environmental impact statement which is a federal mandate. And the tribes did not invent the prior appropriation doctrine, which favors parties that build large water diversions over people who were simply living and using the waters in the region. Nor did they erect the numerous legal obstacles that make it difficult for tribes to assert their claims.

Under binding Supreme Court precedent, it is perfectly permissible for the United States to take on the powers of the trustee without the associated duties and even to use these powers to serve interests other than those of the beneficial owner of the trust property. "Congress may style its relations with the Indians a trust without assuming all the fiduciary duties of a private trustee, creating a trust relationship that is limited or bare compared to a trust relationship between private parties at common law," Navajo Nation, quoting U.S. v. Jicarilla Apache Nation (2011). It may even "structure[] the trust relationship to pursue its own policy goals"—goals which conflict with the tribes whose land is being managed.

The Court has shown a willingness to take the "bare trust" concept all the way to its logical conclusion. For example, in U.S. v. Navajo Nation (2003) the BIA approved a below-market royalty rate for Indian coal, over the objections of the Navajo Nation which was actively bargaining on its own behalf. The Court held that this was not a breach of trust; as long as the royalty rate was above the very-low statutory minimum the BIA owed no further legal duties to the Navajo Nation. Even more standard BIA decisions routinely take into account interests besides those of the beneficial owners of the property, mostly environmentalists and other NIMBYs groups.

Although the parties and amicus briefs (including ours) made an effort to distinguish this line of cases, they are an embarrassment and should be overruled. As Justice Gorsuch argued in dissent, when the United States is acting as a trustee, managing tribal assets on behalf of the tribes, it should be held to the same legal standard as a private trustee: "something stricter than the morals of the market place[,] [n]ot honesty alone, but the punctilio of an honor the most sensitive." Meinhard v. Salmon (N.Y. 1928). The "morals of the marketplace" would actually be a substantial upgrade, which is why tribes always secure their own legal counsel and economic valuations when negotiating important contracts.

The United States should not be allowed to exercise the powers of a trustee without also shouldering the most basic and minimal duties that come with those powers: to identify the property held in trust, segregate that property from the trustee's own property to the extent possible, and to refrain from conflicts of interest and self-dealing with regard to that property. Restatement (Third) of Trusts § 84 cmt. d (2012). The United States cannot simultaneously act as a trustee, a regulator, and the builder and operator of large dams and other structures that divert water away from tribal owners to more politically powerful interests.

In a broader sense, Arizona v Navajo Nation makes clear the need for a structural reform: the federal government's Indian trust functions need to be segregated into an independent agency that answers only to its fiduciaries, with a clear understanding that no other groups have standing in court to challenge decisions made on behalf of a tribe.

But if the United States is permitted to administer a "bare trust," then the tribes should be permitted to politely decline any unwanted trust services and BIA processes and to instead manage their own affairs. Under current law, the tribes suffer all the interference of a meddlesome trustee without any legal guarantee that the trustee uses those powers in their interests.