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United States v. Pend Oreille County Pub. Util. Dist. No. 1

ELR Citation: 24 ELR 21275
Nos. Nos. 88-3617 et al., 28 F.3d 1544/(9th Cir., 07/14/1994) trespass damages aff'd

The court holds that the "most profitable use of land" is the proper measure of damages owed a Native American tribe for trespass to its lands caused by a hydroelectric dam operator's flooding of part of the Kalispel Indian Reservation in Washington State for over 30 years. The court first reaffirms its previous holding that a trespass occurred. It is too late for the operator to challenge the existence of a trespass because the issue was resolved against it in an earlier phase of the litigation. Although the project license provides an administrative procedure for compensating the tribe in the event of flooding, the license does not authorize the operator to flood the land. If the license authorized flooding as long as compensation was paid, the operator would be taking Native American land by inverse condemnation—a power it does not have under the Federal Power Act (FPA) or any other federal statute. And the FPA prohibits use of Native American land for power production except under strict conditions that the operator failed to meet. Next, the court rejects the operator's contention that under the project license the Secretary of the Interior has primary jurisdiction over property damage issues. Congress neither required the Secretary to include the damages provision in the license nor delegated to the Secretary the authority to resolve damage issues.

Turning to the standard for calculating damages for the trespass, the court holds that the operator must pay the annual charge required by FPA §10(e) for use of the tribal land, which is to be valued as part of the power project. Compensation is not limited to the rental value of the land for grazing purposes. The court notes that valuing the land as part of the power project will ensure that the tribe is compensated for past loss and encourage the operator's future compliance with the FPA.

The court holds that the district court erred in denying the tribe injunctive relief on the ground that the tribe will be fully compensated in a proceeding the operator has initiated to condemn reservation lands for a permanent flowage easement. Congress has not authorized licensees to condemn tribal lands held in trust by the United States, and the operator has not obtained a judgment to condemn lands of individual tribal allottees. On remand, the district court should consider whether to issue an injunction in light of the public need for power and the operator's inability to raise the river level without violating the tribe's rights. The court affirms the district court's decision not to grant declaratory relief concerning the calculation of future damages. The court also upholds the district court's denial, as untimely, of the tribe's motion to amend its complaint in intervention to allege a claim for water and fishing rights. The tribe's delay in filing the motion was extreme and unexplained, and granting the motion would substantially prejudice the operator. The court holds that the district court erred in dismissing the operator's counterclaim in condemnation for failure to serve the individual allottees. The operator properly served the allottees by serving attorneys for the government and the tribe, because these attorneys also represent the allottees. On remand, the district court should consider whether the operator can state a claim for condemnation and determine whether prejudgment interest is available under federal law.

Counsel for Plaintiff
Elizabeth A. Peterson
Environment and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendant
Jerry K. Boyd
Paine, Hamblen, Coffin, Brooke & Miller
Washington Trust Financial Ctr.
717 W. Sprague Ave., Ste. 1200, Spokane WA 99204
(509) 455-6000

Before Schroeder and Fletcher, JJ.