United States v. Verde Ditch, 1 CA-CV 15-0690

Background

The 1909 Hance v. Arnold decree apportioned fractional interests in the Verde Ditch among shareholders and authorized court-appointed commissioners (Verde Ditch Company, VDC) to manage, maintain, levy assessments, and distribute water by proportion, but did not allocate quantified water rights or priorities.
VDC sought and obtained Yavapai Superior Court authorization to negotiate and execute a Memorandum of Understanding (MOU) with Salt River Project (SRP) to determine “Historic Water Use” (HWU) and to negotiate agreements that would limit Verde Ditch deliveries to lands with HWU.
The United States (on behalf of the Yavapai-Apache Nation) objected, arguing Yavapai County lacked jurisdiction because water-right determinations for the Verde River are part of the Gila River general adjudication in Maricopa County.
Yavapai Superior Court approved VDC’s petition and authorized the MOU; the United States appealed that post-judgment order.
The court of appeals vacated the Yavapai order, holding that the MOU process would effectively adjudicate water rights and therefore falls within the exclusive jurisdiction of the Gila Adjudication in Maricopa County; the 1909 decree does not preserve authority to make such adjudications outside the general stream adjudication process.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether Yavapai Superior Court had jurisdiction to authorize MOU negotiations/agreements that determine HWU and affect water rights	United States: MOU would adjudicate water rights and is within exclusive jurisdiction of the Gila Adjudication in Maricopa County	VDC/SRP: MOU is a procedural/administrative agreement under the 1909 Decree and not an adjudication of water rights; Yavapai court retains authority over VDC matters	Held: Yavapai court lacks subject-matter jurisdiction; MOU proceedings would adjudicate water rights and must occur in the Gila Adjudication
Whether the 1909 Decree precludes Maricopa adjudication or preserves exclusive adjudicatory power in Yavapai	United States: 1909 Decree did not quantify water rights; general adjudication supersedes and must adjudicate rights	VDC/SRP: 1909 Decree and court supervision over VDC preserve local authority to resolve allocations among shareholders	Held: 1909 Decree only fixed fractional ditch interests and administrative authority; it did not allocate appropriative water rights that would exempt the ditch from general adjudication
Whether private agreements among claimants (or court-approved settlements) can bind non-parties or be approved outside the Gila Adjudication	United States: Such agreements can affect other claimants and interfere with senior rights; must be handled through the Gila Adjudication	VDC/SRP: Agreements would bind only parties and are permissible outside Maricopa	Held: Agreements that effectively determine HWU or sever/transfer rights implicate other claimants and cannot be approved outside the Gila Adjudication; statutory scheme and caselaw forbid circumventing comprehensive adjudication
Whether prior decrees (like 1909 decree) bar general adjudication or require local court continuing jurisdiction	VDC/SRP: The 1909 decree is a prior decree that preserves local adjudicatory effect	United States: Prior decrees are evidence but do not bar general adjudication; rights must be adjudicated under A.R.S. ch. 45	Held: Prior decrees serve as evidence/presumptions in the Gila Adjudication but do not foreclose adjudication there; Yavapai cannot expand jurisdiction based on the 1909 decree

Key Cases Cited

Williams v. Williams, 228 Ariz. 160 (App. 2011) (appealability of post-judgment special orders)
In re Estate of McGathy, 226 Ariz. 277 (App. 2010) (rationale for allowing appeals from orders resolving new claims)
Ader v. Estate of Felger, 240 Ariz. 32 (App. 2016) (subject-matter jurisdiction is reviewed de novo)
In re Rights to Use of Gila River, 171 Ariz. 230 (1992) (consolidation and scope of Gila River adjudication)
Gabel v. Tatum, 146 Ariz. 527 (App. 1985) (actions affecting water rights within Gila adjudication cannot be litigated outside Maricopa County)
San Carlos Apache Tribe v. Superior Court ex rel. County of Maricopa, 193 Ariz. 195 (1999) (limits on incorporating settlements that affect other claimants in inter se adjudication)
St. Johns Irrigation & Ditch Co. v. Arizona Water Comm’n, 127 Ariz. 350 (App. 1980) (ADWR authority and interaction with court decrees; distinguished here)
United States v. Superior Court in & for Maricopa County, 144 Ariz. 265 (1985) (treatment of prior decrees under adjudication statutes)
In re Gen. Adjudication of All Rights to Use Water in Gila River Sys. & Source, 212 Ariz. 64 (2006) (Globe Equity) (distinguishable: prior decree there quantified rights and had preclusive effect)