Can Utah courts adjudicate federal reclamation project water rights? Strawberry Water Users Ass'n v. Bureau of Reclamation Explained

In a significant water rights decision, the Utah Supreme Court in Strawberry Water Users Ass’n v. Bureau of Reclamation addressed the complex jurisdictional questions that arise when federal reclamation projects intersect with state water law.

Background and Facts

The dispute centered on the Strawberry Valley Project, a federal reclamation project that diverts water from the Duchesne River (Colorado River drainage) to Utah County (Great Basin). The Strawberry Water Users Association sought to file change applications with the Utah State Engineer for project water, while the United States claimed exclusive ownership and control. Both the Third and Eighth District Courts dismissed Strawberry’s petitions for interlocutory decree under Utah’s general adjudications statute, finding the claims involved federal contracts rather than state water rights.

Key Legal Issues

The case presented three main issues: (1) which court—state or federal—had jurisdiction to adjudicate water rights ownership; (2) who had the right to file change applications with the State Engineer; and (3) how to handle competing claims for return flow water from the imported project water. The court also had to interpret the interaction between federal reclamation law and Utah water law principles.

Court’s Analysis and Holding

The Utah Supreme Court reversed the dismissals, holding that jurisdiction does not rest in just one court. The court explained that under Utah water law, “ownership” of water rights refers only to the right to use water, as all waters belong to the public. The court distinguished between issues governed by state water law (appropriation, use, and distribution of water) and federal contract issues. Applying the McCarran Amendment, the court found that Utah courts have jurisdiction over water rights adjudication while federal courts have jurisdiction over contract interpretation under 43 U.S.C. § 390uu.

Practice Implications

This decision establishes that federal reclamation project disputes often require coordination between state and federal courts. Practitioners must carefully analyze whether their clients’ claims involve state water law principles (such as beneficial use requirements and change applications) or federal contract rights. The court’s guidance on beneficial use as the foundation of water rights, even in federal projects, reinforces Utah’s water law primacy under the Reclamation Act. The decision also suggests that return flow issues from imported water may present novel questions of state water law requiring future adjudication.