Big Horn VI
48 P.3d 1040 (Wyo. 2002)

On June 14, 2002, the Wyoming Supreme Court issued its sixth decision in the general adjudication of water rights in the Big Horn River System. See In re the General Adjudication of All Rights to Use Water in the Big Horn River System and All Other Sources, 48 P.3d 1040 (2002) (Big Horn VI). Big Horn VI addressed two questions of interest to practitioners in the field of federal Indian reserved water rights. Both questions have to do with so-called "Walton" water rights, which are named after a series of Ninth Circuit cases establishing that non-Indian purchasers of allotments receive a right to share ratably in federal Indian reserved water rights to the extent applied to beneficial use either by the allottee prior to the conveyance or by the non-Indian "with reasonable diligence after the passage of the title." Colville Confederated Tribes v. Walton, 647 F.2d 42, 51 (9th Cir. 1981) (Walton II); see also id., 460 F.Supp 1320 (E.D. Wash. 1978) (Walton I); 752 F.2d 397 (9th Cir. 1985) (Walton III).

Generally speaking, the court accepted the propositions that "Walton rights must be narrowly construed" and that the claimant shoulders the burden of proof. Id. at 1046, 1056-57. It also accepted the trial court's general rule that "proof of irrigation within five years of acquisition raises a presumption of reasonable [diligence]," but that if "water is not applied to a beneficial use within five years," then the court must look to "factors such as intent, distance and/or obstacles to the water source and diligence" in determining whether water was put to use with reasonable diligence. Id. at 1055.

The first specific question addressed in Big Horn VI was whether non-Indian purchasers of allotments within the federal Wind River Irrigation Project could "rely on the United States' diligence in developing the . . . Project" to prove "reasonable diligence" in applying water to beneficial use after the conveyance from the allottee. See Big Horn VI, 48 P.3d at 1045. The court's answer was heavily dependent on the specific facts presented.

The irrigation project was initiated under state law in 1905 and its development continued with state approval through the 1960s. Id. at 1044, 1046. "The . . . claimants' properties passed out of allotment status during the period of 1900-1920 . . . . The federal project did not begin delivering water for use until the 1930s and 1940s." Id. at 1044.

Historical evidence established that the project's purpose was "to protect and provide water to the Indian lands" and B as development proceeded B "to permit the non-Indian purchasers to maintain the water rights they acquired from the Indian allottees by allowing beneficial use when the water was finally available through development of the project." Id. at 1050. The court found that "absent the United States' assistance in constructing the Wind River Irrigation Project, irrigation would not have been possible on any of the Walton claimants' lands." Id.

The court held that "the federal law of reserved rights relies upon the reasonable diligence standard established in state prior appropriation law to determine the validity of Walton right claims, and reliance upon the irrigation project met that standard" under Wyoming's relation-back doctrine (i.e. "'priority is determined from the date of the manifestation of intent, not the date of actual application of the water to beneficial use.'"). Id. at 1045-46, 1049 (quoting A. Dan Tarlock, Law of Water Rights and Resources ' 5:62 at 5-104 (2001)). Thus, emphasizing "the unique factual circumstances this dispute presents," id. at 1054, the court held that:

under the circumstances of this case and presuming irrigation was not possible absent the project in order to establish beneficial use of the reserved water within a reasonable time to retain the federal reserved right, the . . . claimants must demonstrate their efforts to put the lands under irrigation within a reasonable time and with due diligence, as defined by state law, after the federal project facilities became available to the properties.

Id. at 1055. At the same time, the court made clear that "[i]f there had been a reasonable means to irrigate any of these properties without the project, the Walton standard and state law would require the irrigation be accomplished through the due diligence of the individual successor to the allottee." Id.

The court had little difficulty answering the second question, which was whether "the computation of the 'reasonable time' element of a Walton claim begins to run when the allotted property first passes out of allotment status or, in the circumstance of land later repurchased by an Indian owner, from the date title transfers from the most recent Indian owner to a non-Indian?" Id. at 1045. The court found previous decisions on the issue clear and held that "the calculation of 'reasonable time' begins with the immediate grantee of the original allottee." Id. at 1056. The court also noted that if it were to hold otherwise "[t]here would be no certainty of priority dates because mere repurchase by an Indian successor anywhere in the chain of title would restart the 'reasonable time'" and that "such a holding could, and perhaps invariably would, lead to collusive transactions by those willing to find a 'straw man' for the precise purpose of thwarting established priority dates." Id. (footnote omitted).