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Western States Water Council Legal Committee Sioux Falls, South Dakota May 3, 2007 RECENT DEVELOPMENT IN LITIGATION IN MEMBER STATES Arizona Bill Staudenmaier: You heard from me earlier on the Gila River Indian settlement, which is the most active piece of legal work in the state of Arizona. That's got a lot of us real busy. As I said, it's going to run its course now to the end of the calendar year. The other thing you've heard me talk about in the past is the Arizona State Land Department claiming to have a reserved water right for their state trust lands. That has been awaiting a decision from the special master who serves in the Gila River Adjudication Court. I'll let John comment on the fact that New Mexico had a recent court ruling rejecting a very similar claim. In fact, the claims were so similar that the briefs looked like they were just cut and pasted from one to another. I know that the two state agencies are collaborating quite closely on those claims. The bottom line is, there is now one state court ruling, which is now on appeal in New Mexico, rejecting a claim to that affect. This has been the most unifying issue in water law history in the State of Arizona, since everyone else other than the State Land Department hates the idea and is actively opposing it. Also, there is a pending application for export of groundwater from the State of Arizona into the State of Nevada. That was subjected to a hearing in March and is now awaiting an administrative law judge's decision. Herb Guenther, Director of AZ DWR, will ultimately make a decision as to whether the state will grant the requested permit to export water, or deny it. New Mexico John Utton: The water judge appointed in the San Juan adjudication, as Bill mentioned, rejected the state land office's claim. The right state agency prevailed and so the state land office in New Mexico filed for a notice of an appeal. If they hadn't of, the citizens in New Mexico would offiled a breach of trust claim against the state land office for not protecting their right. I expect the judge's decision is going to be upheld in New Mexico. As mentioned earlier, our Indian water rights cases are moving forward. We have three Indian reservations in New Mexico. The claims of the pueblo tribes, if they have reserved claims, are fairly small because they're on their original land. It's less clear what law applies to those. The Aamodt case, which you all know about and which was filed back in 1969, is struggling with some difficult issues. We've got two settlements that would settle four ofthe pueblo claims, so we only have fourteen to go. If you added up the federal cost share in the Aamodt settlement it would be about $40 million a pueblo. It's going to be a challenge for the other fourteen. California Jeanine Jones: We actually have a few interesting things to report. For those of you who follow the Colorado River matters, the 9th Circuit's preliminary injunction against going forward with the All American Canal lining project was tossed. Since the case was dismissed, construction starts on or around June 1st, which is good. This is basically a water conservation project in the U.S. to capture through canal lining seepage that folks in Mexico allege they have been relying on for many years and should be counted as part as their treaty water. 7