Escondido Mutual Water Co. v. La Jolla Band of Mission Indians

Section 4(e) of the Federal Power Act (Act), 16 U.S.C. § 797(e), authorized the Federal Energy Regulatory Commission (FERC) (defendant) to issue licenses for dams and other public works on public lands or reservations, subject to conditions imposed by agencies with jurisdiction over the land. Section 4(e) also required FERC to make a finding that each FERC-issued license would not interfere or be inconsistent with the purpose for which a reservation was created or acquired. The Act defined “reservations” as including tribal and non-tribal lands. Escondido Mutual Water Company (Escondido) (defendant) applied for a license for a hydropower plant located on or near American Indian reservations in Southern California. FERC issued the license without including conditions imposed by the secretary of the interior (secretary). According to FERC, section 4(e) did not require acceptance of the conditions without modification, and FERC’s no-interference-or-inconsistency finding applied only to reservations that were physically occupied by project facilities. The La Jolla Band of Mission Indians and other tribes (plaintiffs) petitioned for review of FERC’s decision to issue a license to Escondido without conditions. The court of appeals reversed FERC’s decision with respect to the secretary’s conditions. The court of appeals also found that “reservations” included water rights, and that FERC’s no-interference-or-inconsistency finding therefore applied to a licensed activity’s effect on tribal water rights. The United States Supreme Court granted certiorari to determine whether the Act’s legislative history or statutory scheme supported the court of appeals’ interpretation of the Act.