ARIZONA v. CALIFORNIA on exceptions to report of special master

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ARIZONA v. CALIFORNIA
on exceptions to report of special master
No. 8, Orig. Argued April 25, 2000—Decided June 19, 2000
This litigation began in 1952 when Arizona invoked this Court’s original
jurisdiction to settle a dispute with California over the extent of each
State’s right to use water from the Colorado River system. The United
States intervened, seeking water rights on behalf of, among others,
five Indian reservations, including the Fort Yuma (Quechan) Indian Res-
ervation, the Colorado River Indian Reservation, and the Fort Mojave
Indian Reservation. The first round of the litigation culminated in Ari-
zona v. California, 373 U. S. 546 (Arizona I), in which the Court held
that the United States had reserved water rights for the five reser-
vations, id., at 565, 599–601; that those rights must be considered pres-
ent perfected rights and given priority because they were effective as
of the time each reservation was created, id., at 600; and that those
rights should be based on the amount of each reservation’s practicably
irrigable acreage as determined by the Special Master, ibid. In its 1964
decree, the Court specified the quantities and priorities of the water
entitlements for the parties and the Tribes, Arizona v. California, 376
U. S. 340, but held that the water rights for the Fort Mojave and Colo-
rado River Reservations would be subject to appropriate adjustment by
future agreement or decree in the event the respective reservations’
disputed boundaries were finally determined, id., at 345. The Court’s
1979 supplemental decree again deferred resolution of reservation
boundary disputes and allied water rights claims. Arizona v. Califor-
nia, 439 U. S. 419, 421 (per curiam). In Arizona v. California, 460
U. S. 605 (Arizona II), the Court concluded, among other things, that
various administrative actions taken by the Secretary of the Interior,
including his 1978 order recognizing the entitlement of the Quechan
Tribe (Tribe) to the disputed boundary lands of the Fort Yuma Reserva-
tion did not constitute final determinations of reservation boundaries
for purposes of the 1964 decree. Id., at 636–638. The Court also held
in Arizona II that certain lands within undisputed reservation bound-
aries, for which the United States had not sought water rights in
Arizona I—the so-called “omitted lands”—were not entitled to water
under res judicata principles. 460 U. S., at 626. The Court’s 1984 sup-
plemental decree again declared that water rights for all five reserva-
tions would be subject to appropriate adjustments if the reservations’
boundaries were finally determined. Arizona v. California, 466 U. S.

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144, 145. In 1987, the Ninth Circuit dismissed, on grounds of the
United States’ sovereign immunity, a suit by California state agencies
that could have finally determined the reservations’ boundaries. This
Court affirmed the Ninth Circuit’s judgment by an equally divided vote.
The present phase of the litigation concerns claims by the Tribe and
the United States on the Tribe’s behalf for increased water rights for
the Fort Yuma Reservation. These claims rest on the contention that
the Fort Yuma Reservation encompasses some 25,000 acres of disputed
boundary lands not attributed to that reservation in earlier stages of
the litigation. The land in question was purportedly ceded to the
United States under an 1893 Agreement with the Tribe. In 1936, the
Department of the Interior’s Solicitor Margold issued an opinion stating
that, under the 1893 Agreement, the Tribe had unconditionally ceded
the lands. The Margold Opinion remained the Federal Government’s
position for 42 years. In 1946, Congress enacted the Indian Claims
Commission Act, establishing a tribunal with power to decide tribes’
claims against the Government. The Tribe brought before the Commis-
sion an action, which has come to be known as Docket No. 320, challeng-
ing the 1893 Agreement on two mutually exclusive grounds: (1) that it
was void, in which case the United States owed the Tribe damages es-
sentially for trespass, and (2) that it constituted an uncompensated tak-
ing of tribal lands. In 1976, the Commission transferred Docket No. 320
to the Court of Claims. In the meantime, the Tribe asked the Interior
Department to reconsider the Margold Opinion. Ultimately, in a 1978
Secretarial Order, the Department changed its position and confirmed
the Tribe’s entitlement to most of the disputed lands. A few months
after this Court decided in Arizona II that the 1978 Secretarial Order
did not constitute a final determination of reservation boundaries, the
United States and the Tribe entered into a settlement of Docket No. 320,
which the Court of Claims approved and entered as its final judgment.
Under the settlement, the United States agreed to pay the Tribe $15
million in full satisfaction of the Tribe’s Docket No. 320 claims, and the
Tribe agreed that it would not further assert those claims against the
Government. In 1989, this Court granted the motion of Arizona, Cali-
fornia, and two municipal water districts (State parties) to reopen the
1964 decree to determine whether the Fort Yuma, Colorado River, and
Fort Mojave Reservations were entitled to claim additional boundary
lands and, if so, additional water rights. The State parties assert here
that the Fort Yuma claims of the Tribe and the United States are
precluded by Arizona I and by the Claims Court consent judgment in
Docket No. 320. The Special Master has prepared a report recommend-
ing that the Court reject the first ground for preclusion but accept the
second. The State parties have filed exceptions to the Special Master’s

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first recommendation, and the United States and the Tribe have filed
exceptions to the second. The Master has also recommended approval
of the parties’ proposed settlements of claims for additional water for
the Fort Mojave and Colorado River Reservations, and has submitted a
proposed supplemental decree to effectuate the parties’ accords.
Held:
1. In view of the State parties’ failure to raise the preclusion argu-
ment earlier in the litigation, despite ample opportunity and cause to do
so, the claims of the United States and the Tribe to increased water
rights for the disputed boundary lands of the Fort Yuma Reservation
are not foreclosed by Arizona I. According to the State parties, those
claims are precluded by the finality rationale this Court employed in
dismissing the “omitted lands” claims in Arizona II, 460 U. S., at 620–
621, 626–627, because the United States could have raised the Fort
Yuma Reservation boundary lands claims in Arizona I, but deliberately
decided not to do so. In rejecting this argument, the Special Master
pointed out that the Government did not assert such claims in Arizona I
because, at that time, it was bound to follow the Margold Opinion, under
which the Tribe had no claim to the boundary lands. The Master con-
cluded that the 1978 Secretarial Order, which overruled the Margold
Opinion and recognized the Tribe’s beneficial ownership of the boundary
lands, was a circumstance not known in 1964, one that warranted an
exception to the application of res judicata doctrine. In so concluding,
the Special Master relied on an improper ground: The 1978 Secretarial
Order does not qualify as a previously unknown circumstance that can
overcome otherwise applicable preclusion principles. That order did
not change the underlying facts in dispute; it simply embodied one par-
ty’s changed view of the import of unchanged facts. However, the
Court agrees with the United States and the Tribe that the State par-
ties’ preclusion defense is inadmissible. The State parties did not raise
the defense in 1978 in response to the United States’ motion for a sup-
plemental decree granting additional water rights for the Fort Yuma
Reservation or in 1982 when Arizona II was briefed and argued. Un-
accountably, the State parties first raised their res judicata plea in 1989,
when they initiated the current round of proceedings. While preclusion
rules are not strictly applicable in the context of a single ongoing origi-
nal action, the principles upon which they rest should inform the Court’s
decision. Arizona II, 460 U. S., at 619. Those principles rank res judi-
cata an affirmative defense ordinarily lost if not timely raised. See Fed.
Rule Civ. Proc. 8(c). The Court disapproves the notion that a party
may wake up and effectively raise a defense years after the first oppor-
tunity to raise it so long as the party was (though no fault of anyone

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else) in the dark until its late awakening. Nothing in Arizona II sup-
ports the State parties’ assertion that the Court expressly recognized
the possibility that future Fort Yuma boundary lands claims might be
precluded. 460 U. S., at 638, distinguished. Of large significance, this
Court’s 1979 and 1984 supplemental decrees anticipated that the dis-
puted boundary issues for all five reservations, including Fort Yuma,
would be “finally determined” in some forum, not by preclusion but on
the merits. The State parties themselves stipulated to the terms of the
1979 supplemental decree and appear to have litigated the Arizona II
proceedings on the understanding that the boundary disputes should be
resolved on the merits, see, e. g., id., at 634. Finally, the Court rejects
the State parties’ argument that this Court should now raise the preclu-
sion question sua sponte. The special circumstances in which such judi-
cial initiative might be appropriate are not present here. See United
States v. Sioux Nation, 448 U. S. 371, 432 (Rehnquist, J., dissenting).
Pp. 406–413.
2. The claims of the United States and the Tribe to increased water
rights for the disputed boundary lands of the Fort Yuma Reservation
are not precluded by the consent judgment in Docket No. 320. The
Special Master agreed with the State parties’ assertion to the contrary.
He concluded that, because the settlement extinguished the Tribe’s
claim to title in the disputed lands, the United States and the Tribe
cannot seek additional water rights based on the Tribe’s purported ben-
eficial ownership of those lands. Under standard preclusion doctrine,
the Master’s recommendation cannot be sustained. As between the
Tribe and the United States, the settlement indeed had, and was in-
tended to have, claim-preclusive effect. But settlements ordinarily lack
issue-preclusive effect. This differentiation is grounded in basic res ju-
dicata doctrine. The general rule is that issue preclusion attaches only
when an issue is actually litigated and determined by a valid and final
judgment. See United States v. International Building Co., 345 U. S.
502, 505–506. The State parties assert that common-law principles of
issue preclusion do not apply in the special context of Indian land claims.
They maintain that the Indian Claims Commission Act created a special
regime of statutory preclusion. This Court need not decide whether
some consent judgments in that distinctive context might bar a tribe
from asserting title even in discrete litigation against third parties, for
the 1983 settlement of Docket No. 320 plainly could not qualify as such
a judgment. Not only was the issue of ownership of the disputed
boundary lands not actually litigated and decided in Docket No. 320, but,
most notably, the Tribe proceeded on alternative and mutually exclusive
theories of recovery, taking and trespass. The consent judgment em-
braced all of the Tribe’s claims with no election by the Tribe of one

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theory over the other. The Court need not accept the United States’
invitation to look behind the consent judgment at presettlement stipula-
tions and memoranda purportedly demonstrating that the judgment was
grounded on the parties’ shared view, after the 1978 Secretarial Order,
that the disputed lands belong to the Tribe. Because the settlement
was ambiguous as between mutually exclusive theories of recovery, the
consent judgment is too opaque to serve as a foundation for issue preclu-
sion. Pp. 413–418.
3. The Court accepts the Special Master’s recommendations and ap-
proves the parties’ proposed settlements of the disputes respecting ad-
ditional water for the Fort Mojave and Colorado River Reservations.
Pp. 418–419.
Exception of State parties overruled; Exceptions of United States and
Quechan Tribe sustained; Special Master’s recommendations to approve
parties’ proposed settlements respecting Fort Mojave and Colorado
River Reservations are adopted, and parties are directed to submit any
objections they may have to Special Master’s proposed supplemental
decree; Outstanding water rights claims associated with disputed Fort
Yuma Reservation boundary lands remanded.
Ginsburg, J., delivered the opinion of the Court, in which Stevens,
Scalia, Kennedy, Souter, and Breyer, JJ., joined. Rehnquist, C. J.,
filed an opinion concurring in part and dissenting in part, in which O’Con-
nor and Thomas, JJ., joined, post, p. 422.
Jeffrey P. Minear argued the cause for the United States.
With him on the briefs were Solicitor General Waxman,
Assistant Attorney General Schiffer, and Deputy Solicitor
General Kneedler.
Mason D. Morisset argued the cause for defendant Que-
chan Indian Tribe. With him on the briefs was K. Allison
McGaw.
Jerome C. Muys argued the cause for the State parties.
With him on the briefs were Bill Lockyer, Attorney General
of California, Richard M. Frank, Chief Assistant Attorney
General, Mary B. Hackenbracht, Assistant Attorney Gen-
eral, Douglas B. Noble, Deputy Attorney General, Michael
Pearce, Steven B. Abbott, and Karen L. Tachiki.*
*John M. Lindskog filed a brief for the West Bank Homeowners Associa-
tion as amicus curiae.

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Opinion of the Court
Justice Ginsburg delivered the opinion of the Court.
In the latest chapter of this long-litigated original-
jurisdiction case, the Quechan Tribe (Tribe) and the United
States on the Tribe’s behalf assert claims for increased rights
to water from the Colorado River. These claims are based
on the contention that the Fort Yuma (Quechan) Indian Res-
ervation encompasses some 25,000 acres of disputed bound-
ary lands not attributed to that reservation in earlier stages
of the litigation. In this decision, we resolve a threshold
question regarding these claims to additional water rights:
Are the claims precluded by this Court’s prior decision in
Arizona v. California, 373 U. S. 546 (1963) (Arizona I), or
by a consent judgment entered by the United States Claims
Court in 1983? The Special Master has prepared a report
recommending that the Court reject the first ground for pre-
clusion but accept the second. We reject both grounds for
preclusion and remand the case to the Special Master for
consideration of the claims for additional water rights appur-
tenant to the disputed boundary lands.
I
This litigation began in 1952 when Arizona invoked our
original jurisdiction to settle a dispute with California over
the extent of each State’s right to use water from the Colo-
rado River system. Nevada intervened, seeking a determi-
nation of its water rights, and Utah and New Mexico were
joined as defendants. The United States intervened and
sought water rights on behalf of various federal establish-
ments, including five Indian reservations: the Chemehuevi
Indian Reservation, the Cocopah Indian Reservation, the
Fort Yuma (Quechan) Indian Reservation, the Colorado
River Indian Reservation, and the Fort Mojave Indian Res-
ervation. The Court appointed Simon Rifkind as Special
Master.
The first round of the litigation culminated in our opinion
in Arizona I. We agreed with Special Master Rifkind that

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the apportionment of Colorado River water was governed by
the Boulder Canyon Project Act of 1928, 43 U. S. C. § 617
et seq., and by contracts entered into by the Secretary of the
Interior pursuant to the Act. We further agreed that the
United States had reserved water rights for the five reserva-
tions under the doctrine of Winters v. United States, 207
U. S. 564 (1908). See Arizona I, 373 U. S., at 565, 599–601.
Because the Tribes’ water rights were effective as of the
time each reservation was created, the rights were consid-
ered present perfected rights and given priority under the
Act. Id., at 600. We also agreed with the Master that the
reservations’ water rights should be based on the amount of
practicably irrigable acreage on each reservation and sus-
tained his findings as to the relevant acreage for each reser-
vation. Ibid. Those findings were incorporated in our de-
cree of March 9, 1964, which specified the quantities and
priorities of the water entitlements for the States, the
United States, and the Tribes. Arizona v. California, 376
U. S. 340. The Court rejected as premature, however, Mas-
ter Rifkind’s recommendation to determine the disputed
boundaries of the Fort Mojave and Colorado River Indian
Reservations; we ordered, instead, that water rights for
those two reservations “shall be subject to appropriate ad-
justment by agreement or decree of this Court in the event
that the boundaries of the respective reservations are finally
determined.” Id., at 345.
In 1978, the United States and the State parties jointly
moved this Court to enter a supplemental decree identifying
present perfected rights to the use of mainstream water in
each State and their priority dates. The Tribes then filed
motions to intervene, and the United States ultimately
joined the Tribes in moving for additional water rights for
the five reservations. Again, the Court deferred resolution
of reservation boundary disputes and allied water rights
claims. The supplemental decree we entered in 1979 set out
the water rights and priority dates for the five reservations

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under the 1964 decree, but added that the rights for all five
reservations (including the Fort Yuma Indian Reservation
at issue here) “shall continue to be subject to appropriate
adjustment by agreement or decree of this Court in the
event that the boundaries of the respective reservations are
finally determined.” Arizona v. California, 439 U. S. 419,
421 (per curiam). The Court then appointed Senior Circuit
Judge Elbert P. Tuttle as Special Master and referred to him
the Tribes’ motions to intervene and other pending matters.
Master Tuttle issued a report recommending that the
Tribes be permitted to intervene, and concluding that vari-
ous administrative actions taken by the Secretary of the
Interior constituted “final determinations” of reservation
boundaries for purposes of allocating water rights under the
1964 decree. (Those administrative actions included a 1978
Secretarial Order, discussed in greater detail infra, at 404–
405, which recognized the Quechan Tribe’s entitlement to
the disputed boundary lands of the Fort Yuma Reservation.)
Master Tuttle also concluded that certain lands within the
undisputed reservation boundaries but for which the United
States had not sought water rights in Arizona I—the so-
called “omitted lands”—had in fact been practicably irrigable
at the time of Arizona I and were thus entitled to water.
On these grounds, Master Tuttle recommended that the
Court reopen the 1964 decree to award the Tribes additional
water rights.
In Arizona v. California, 460 U. S. 605 (1983) (Arizona
II), the Court permitted the Tribes to intervene, but other-
wise rejected Master Tuttle’s recommendations. The Sec-
retary’s determinations did not qualify as “final determina-
tions” of reservation boundaries, we ruled, because the
States, agencies, and private water users had not had an op-
portunity to obtain judicial review of those determinations.
Id., at 636–637. In that regard, we noted that California
state agencies had initiated an action in the United States
District Court for the Southern District of California chal-

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lenging the Secretary’s decisions, and that the United States
had moved to dismiss that action on various grounds, includ-
ing sovereign immunity. “There will be time enough,” the
Court stated, “if any of these grounds for dismissal are sus-
tained and not overturned on appellate review, to determine
whether the boundary issues foreclosed by such action are
nevertheless open for litigation in this Court.” Id., at 638.
The Court also held that the United States was barred from
seeking water rights for the lands omitted from presentation
in the proceedings leading to Arizona I; “principles of res
judicata,” we said, “advise against reopening the calculation
of the amount of practicably irrigable acreage.” 460 U. S.,
at 626. In 1984, in another supplemental decree, the Court
again declared that water rights for all five reservations
“shall be subject to appropriate adjustments by agreement
or decree of this Court in the event that the boundaries of
the respective reservations are finally determined.” Ari-
zona v. California, 466 U. S. 144, 145.
The District Court litigation proceeded with the participa-
tion of eight parties: the United States, the States of Arizona
and California, the Metropolitan Water District of Southern
California, the Coachella Valley Water District, and the Que-
chan, Fort Mojave, and Colorado River Indian Tribes. The
District Court rejected the United States’ sovereign im-
munity defense; taking up the Fort Mojave Reservation mat-
ter first, the court voided the Secretary’s determination of
that reservation’s boundaries. Metropolitan Water Dist. of
S. Cal. v. United States, 628 F. Supp. 1018 (SD Cal. 1986).
The Court of Appeals for the Ninth Circuit, however, ac-
cepted the United States’ plea of sovereign immunity, and
on that ground reversed and remanded with instructions to
dismiss the entire case. Specifically, the Court of Appeals
held that the Quiet Title Act, 28 U. S. C. § 2409a, preserved
the United States’ sovereign immunity from suits challeng-
ing the United States’ title “to trust or restricted Indian
lands,” § 2409a(a), and therefore blocked recourse to the Dis-

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trict Court by the States and state agencies. Metropolitan
Water Dist. of S. Cal. v. United States, 830 F. 2d 139 (1987).
We granted certiorari and affirmed the Ninth Circuit’s judg-
ment by an equally divided Court. California v. United
States, 490 U. S. 920 (1989) (per curiam).
The dismissal of the District Court action dispelled any
expectation that a “final determination” of reservation
boundaries would occur in that forum. The State parties
then moved to reopen the 1964 decree, asking the Court to
determine whether the Fort Yuma Indian Reservation and
two other reservations were entitled to claim additional
boundary lands and, if so, additional water rights. Neither
the United States nor the Tribes objected to the reopening
of the decree, and the Court granted the motion. Arizona
v. California, 493 U. S. 886 (1989). After the death in 1990
of the third Special Master, Robert McKay, the Court ap-
pointed Frank J. McGarr as Special Master. Special Master
McGarr has now filed a report and recommendation (McGarr
Report), a full understanding of which requires a discussion
of issues and events specific to the Fort Yuma Indian Reser-
vation. We now turn to those issues and events.
II
The specific dispute before us has its roots in an 1884 Exec-
utive Order signed by President Chester A. Arthur, desig-
nating approximately 72 square miles of land along the
Colorado River in California as the Fort Yuma Indian Reser-
vation (Reservation) for the benefit of the Quechan Tribe.
The Tribe, which had traditionally engaged in farming, of-
fered to cede its rights to a portion of the Reservation to the
United States in exchange for allotments of irrigated land to
individual Indians. In 1893, the Secretary of the Interior
concluded an agreement with the Tribe (1893 Agreement),
which Congress ratified in 1894. The 1893 Agreement pro-
vided for the Tribe’s cession of a 25,000-acre tract of bound-
ary lands on the Reservation. Language in the agreement,

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however, could be read to condition the cession on the per-
formance by the United States of certain obligations, includ-
ing construction within three years of an irrigation canal,
allotment of irrigated land to individual Indians, sale of cer-
tain lands to raise revenues for canal construction, and open-
ing of certain lands to the public domain.
Doubts about the validity and effect of the 1893 Agree-
ment arose as early as 1935. In that year the construction
of the All-American Canal, which prompted the interstate
dispute in Arizona I, see 373 U. S., at 554–555, also sparked
a controversy concerning the Fort Yuma Reservation.
When the Department of the Interior’s Bureau of Reclama-
tion sought to route the canal through the Reservation, the
Department’s Indian Office argued that the Bureau had to
pay compensation to the Tribe for the right-of-way. The
Secretary of the Interior submitted the matter to the De-
partment’s Solicitor, Nathan Margold. In 1936, Solicitor
Margold issued an opinion (Margold Opinion) stating that,
under the 1893 Agreement, the Tribe had unconditionally
ceded the lands in question to the United States. 1 Dept. of
Interior, Opinions of the Solicitor Relating to Indian Affairs
596, 600 (No. M–28198, Jan. 8, 1936). The Margold Opinion
remained the position of the Federal Government for 42
years.
In 1946, Congress enacted the Indian Claims Commission
Act, 60 Stat. 1049, 25 U. S. C. § 70 et seq. (1976 ed.), establish-
ing an Article I tribunal with power to decide claims of
Indian tribes against the United States.1 See generally
1 The Act conferred exclusive jurisdiction on the Commission to resolve
Indian claims solely by the payment of compensation. Section 2 of the
Act gave the Commission jurisdiction over, among other things, claims
alleging that agreements between a tribe and the United States were
vitiated by fraud, duress, or unconscionable consideration, 25 U. S. C.
§ 70a(3) (1976 ed.), claims arising from the unlawful taking of Indian lands
by the United States, § 70a(4), and claims based upon fair and honorable
dealings not recognized by law or equity, § 70a(5). The Commission’s
“[f]inal determinations,” § 70r, were subject to review by the Court of

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United States v. Dann, 470 U. S. 39 (1985). The Tribe filed
an action before the Commission in 1951, challenging the va-
lidity and effect of the 1893 Agreement. In that action, re-
ferred to by the parties as Docket No. 320, the Tribe relied
principally on two mutually exclusive grounds for relief.
First, the Tribe alleged that the 1893 Agreement was ob-
tained through fraud, coercion, and/or inadequate consider-
ation, rendering it “wholly nugatory.” Petition for Loss of
Reservation in Docket No. 320 (Ind. Cl. Comm’n), ¶¶ 15–16,
reprinted in Brief for United States in Support of Exception,
pp. 11a–27a. At the very least, contended the Tribe, the
United States had failed to perform the obligations enumer-
ated in the 1893 Agreement, rendering the cession void.
Id., at ¶ 31. In either event, the Tribe claimed continuing
title to the disputed lands and sought damages essentially
for trespass. Alternatively, the Tribe alleged that the 1893
Agreement was contractually valid but constituted an un-
compensated taking of tribal lands, an appropriation of lands
for unconscionable consideration, and/or a violation of stand-
ards of fair and honorable dealing, for which §§ 2(3)–(5) of the
Act authorized recovery. Id., at ¶¶ 19, 22, 25. According to
this theory of recovery, the 1893 Agreement had indeed
vested in the United States unconditional title to the dis-
Claims, § 70s(b), and, if upheld, were submitted to Congress for payment,
§ 70u. Section 15 authorized the Attorney General to represent the
United States before the Commission and, “with the approval of the
Commission, to compromise any claim presented to the Commission.” 25
U. S. C. § 70n (1976 ed.). The Act provided that such compromises “shall
be submitted by the Commission to the Congress as a part of its report
as provided in section 70t of this title in the same manner as final determi-
nations of the Commission, and shall be subject to the provisions of section
70u of this title.” Ibid. Section 22(a) of the Act provided that “[t]he
payment of any claim, after its determination in accordance with this chap-
ter, shall be a full discharge of the United States of all claims and demands
touching any of the matters involved in the controversy.” 25 U. S. C.
§ 70u(a) (1976 ed.). Pursuant to statute, § 70v, the Commission ceased its
operations in 1978 and transferred its remaining cases to the Court of
Claims.

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puted lands, and the Tribe sought damages as compensation
for that taking. During the more than quarter-century of
litigation in Docket No. 320, the Tribe vacillated between
these two grounds for relief, sometimes emphasizing one and
sometimes the other. See Quechan Tribe of Fort Yuma
Reservation v. United States, 26 Ind. Cl. Comm’n 15 (1971),
reprinted in Brief for United States in Support of Exception,
at 29a–34a.
The Commission conducted a trial on liability, but stayed
further proceedings in 1970 because legislation had been pro-
posed in Congress that would have restored the disputed
lands to the Tribe. The legislation was not enacted, and the
Commission vacated the stay. In 1976, the Commission
transferred the matter to the Court of Claims.
In the meantime, the Tribe had asked the Department of
the Interior to reconsider its 1936 Margold Opinion regard-
ing the 1893 Agreement. In 1977, Interior Solicitor Scott
Austin concluded, in accord with the 1936 opinion, that the
1893 Agreement was valid and that the cession of the dis-
puted lands had been unconditional. Opinion of the Solici-
tor, No. M–36886 (Jan. 18, 1977), 84 I. D. 1 (1977) (Austin
Opinion). It soon became clear both to the Tribe and to in-
terested Members of Congress, however, that the Austin
Opinion had provoked controversy within the Department,
and, after the election of President Carter, the Department
revisited the issue and reversed course. In 1978, without
notice to the parties, Solicitor Leo Krulitz issued an opinion
concluding that the 1893 Agreement had provided for a con-
ditional cession of the disputed lands, that the conditions had
not been met by the United States, and that “[t]itle to the
subject property is held by the United States in trust for the
Quechan Tribe.” Opinion of the Solicitor, No. M–36908 (Jan.
2, 1979), 86 I. D. 3, 22 (1979) (Krulitz Opinion). On Decem-
ber 20, 1978, the Secretary of the Interior issued a Secre-
tarial Order adopting the Krulitz Opinion and confirming
the Tribe’s entitlement to the disputed lands, with the ex-

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press exception of certain lands that the United States had
acquired pursuant to Act of Congress or had conveyed to
third parties.
The 1978 Secretarial Order caused the United States to
change its position both in Docket No. 320, which was still
pending in the Claims Court, and in the present litigation.
Because the Secretarial Order amounted to an admission
that the 1893 Agreement had been ineffective to transfer
title and that the Tribe enjoyed beneficial ownership of the
disputed boundary lands, the United States no longer op-
posed the Tribe’s claim for trespass in Docket No. 320. In
the present litigation, the Secretarial Order both prompted
the United States to file a water rights claim for the affected
boundary lands and provided the basis for the Tribe’s inter-
vention to assert a similar, albeit larger, water rights claim.
See Arizona II, 460 U. S., at 632–633. Those water rights
claims are the subject of the current proceedings.
In August 1983, a few months after this Court decided in
Arizona II that the 1978 Secretarial Order did not constitute
a final determination of reservation boundaries, see supra,
at 399–400, the United States and the Tribe entered into
a settlement of Docket No. 320, which the Court of Claims
approved and entered as its final judgment. Under the
terms of that settlement, the United States agreed to pay
the Tribe $15 million in full satisfaction of “all rights, claims,
or demands which plaintiff [i. e., the Tribe] has asserted or
could have asserted with respect to the claims in Docket
320.” Final Judgment, Docket No. 320 (Aug. 11, 1983). The
judgment further provided that “plaintiff shall be barred
thereby from asserting any further rights, claims, or de-
mands against the defendant and any future action on the
claims encompassed on Docket 320.” Ibid. The United
States and the Tribe also stipulated that the “final judgment
is based on a compromise and settlement and shall not be
construed as an admission by either party for the purposes
of precedent or argument in any other case.” Ibid. Both

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406 ARIZONA v. CALIFORNIA
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the Tribe and the United States continue to recognize the
Tribe’s entitlement to the disputed boundary lands.
III
Master McGarr has issued a series of orders culminating
in the report and recommendation now before the Court.
He has recommended that the Court reject the claims of the
United States and the Tribe seeking additional water rights
for the Fort Yuma Indian Reservation. The Master re-
jected the State parties’ contention that this Court’s Arizona
I decision precludes the United States and the Tribe from
seeking water rights for the disputed boundary lands. He
concluded, however, that the United States and the Tribe are
precluded from pursuing those claims by operation of the
1983 Claims Court consent judgment. The State parties
have filed an exception to the first of these preclusion recom-
mendations, and the United States and the Tribe have filed
exceptions to the second. In Part III–A, infra, we consider
the exception filed by the State parties, and in Part III–B
we address the exceptions filed by the United States and the
Tribe. The Special Master has also recommended that the
Court approve the parties’ proposed settlements respecting
the Fort Mojave and Colorado River Indian Reservations.
No party has filed an exception to those recommendations;
we address them in Part III–C, infra.
A
The States of Arizona and California, the Coachella Valley
Water District, and the Metropolitan Water District of
Southern California (State parties) argued before Special
Master McGarr, and repeat before this Court, that the water
rights claims associated with the disputed boundary lands
of the Fort Yuma Reservation are precluded by the finality
rationale this Court employed in dismissing the “omitted
lands” claims in Arizona II. See supra, at 399–400. Ac-
cording to the State parties, the United States could have

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raised a boundary lands claim for the Fort Yuma Reservation
in the Arizona I proceedings based on facts known at that
time, just as it did for the Fort Mojave and Colorado River
Reservations, but deliberately decided not to do so, just as
it did with respect to the “omitted lands.” In Arizona II,
this Court rejected the United States’ claim for water rights
for the “omitted lands,” emphasizing that “[c]ertainty of
rights is particularly important with respect to water rights
in the Western United States” and noting “the strong in-
terest in finality in this case.” 460 U. S., at 620. Observ-
ing that the 1964 decree determined “the extent of irrigable
acreage within the uncontested boundaries of the reserva-
tions,” id., at 621, n. 12, the Court refused to reconsider
issues “fully and fairly litigated 20 years ago,” id., at 621.
The Court concomitantly held that the Tribes were bound
by the United States’ representation of them in Arizona I.
460 U. S., at 626–627.
The Special Master rejected the State parties’ preclusion
argument. He brought out first the evident reason why the
United States did not assert water rights claims for the Fort
Yuma Reservation boundary lands in Arizona I. At that
point in time, the United States was bound to follow the 1936
Margold Opinion, see supra, at 402, which maintained that
the Tribe had no claim to those lands. “[I]t is clear,” the
Master stated, “that the later Secretary of the Interior opin-
ion arbitrarily changing [the Margold] decision was a circum-
stance not known in 1964, thus constituting an exception to
the application of the rule of res adjudicata.” Special Mas-
ter McGarr Memorandum Opinion and Order No. 4, pp. 6–7
(Sept. 6, 1991). Characterizing the question as “close,” the
Master went on to conclude that “the Tribe is not precluded
from asserting water rights based on boundary land claims
on [sic] this proceeding, because although the U. S. on behalf
of the Tribe failed to assert such claims in the proceeding
leading to the 1964 decree, a later and then unknown circum-

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408 ARIZONA v. CALIFORNIA
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stance bars the application of the doctrine of res judicata to
this issue.” Id., at 7.
While the Special Master correctly recognized the rele-
vance of the Margold Opinion to the litigating stance of the
United States, he ultimately relied on an improper ground in
rejecting the State parties’ preclusion argument. The De-
partment of the Interior’s 1978 Secretarial Order recogniz-
ing the Tribe’s beneficial ownership of the boundary lands,
see supra, at 404–405, does not qualify as a “later and then
unknown circumstance” that can overcome otherwise appli-
cable preclusion principles. The 1978 Order did not change
the underlying facts in dispute; it simply embodied one par-
ty’s changed view of the import of unchanged facts. More-
over, the Tribe can hardly claim to have been surprised by
the Government’s shift in assessment of the boundary lands
ownership question, for the Tribe had been advocating just
such a shift for decades.
The United States and the Tribe, however, urge other
grounds on which to reject the State parties’ argument
regarding the preclusive effect of Arizona I. The United
States and the Tribe maintain that the preclusion rationale
the Court applied to the “omitted lands” in Arizona II is not
equally applicable to the disputed boundary lands,2 and that,
in any event, the State parties have forfeited their preclusion
defense. We agree that the State parties’ preclusion de-
2 The United States and the Tribe point to the holding in Arizona I that
Special Master Rifkind had erred in prematurely considering boundary
lands claims relating to the Fort Mojave and Colorado River Reservations,
see 373 U. S., at 601; they contend that consideration of the Fort Yuma
Reservation boundaries would have been equally premature. They fur-
ther stress that in Arizona II we held the omitted lands claims precluded
because we resisted “reopen[ing] an adjudication . . . to reconsider whether
initial factual determinations were correctly made,” 460 U. S., at 623–624;
in contrast, they maintain, the present claims turn on the validity of the
1893 Agreement and the 1978 Secretarial Order, questions of law not
addressed in prior proceedings.

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fense is inadmissible at this late date, and therefore we do
not reach the merits of that plea. The State parties could
have raised the defense in 1979 in response to the United
States’ motion for a supplemental decree granting additional
water rights for the Fort Yuma Reservation. The State
parties did not do so then, nor did they raise the objection
in 1982 when Arizona II was briefed and argued.3 Unac-
countably, they raised the preclusion argument for the first
time in 1989, when they initiated the current round of pro-
ceedings. See Exception and Brief for State Parties 16; Mo-
tion of State Parties to Reopen Decree in Arizona v. Califor-
nia, O. T. 1989, No. 8 Orig., p. 6, n. 2. The State parties had
every opportunity, and every incentive, to press their current
preclusion argument at earlier stages in the litigation, yet
failed to do so.4
3 Noting that in Arizona II we “encouraged the parties to assert their
legal claims and defenses in another forum,” The Chief Justice con-
cludes that the Court probably would have declined to resolve the preclu-
sion issue at that stage of the case even had the State parties raised it
then. Post, at 423 (opinion concurring in part and dissenting in part).
One can only wonder why this should be so. If this Court had held in
Arizona II that the United States and the Tribe were precluded from
litigating their boundary lands claims, it would have been pointless for the
Court to encourage pursuit of those claims “in another forum”; further
assertion of the claims in any forum would have been barred. In any
event, a party generally forfeits an affirmative defense by failing to raise
it even if the relevant proceeding is ultimately resolved on other grounds.
4 The dissent’s observation that “the only ‘pleadings’ in this case were
filed in the 1950’s,” post, at 422, is beside the point. The State parties
could have properly raised the preclusion defense as early as February
1979, in their response to the United States’ motion for modification of the
decree, yet did not do so. See Response of the States of Arizona, Califor-
nia, and Nevada and the Other California Defendants to the Motion of the
United States for Modification of Decree, O. T. 1978, No. 8 Orig. Alterna-
tively, it was open to the State parties to seek leave to file a supplemental
pleading “setting forth . . . occurrences or events which have happened
since the date of the pleading sought to be amended.” Fed. Rule Civ.
Proc. 15(d). In such a supplemental pleading, and in compliance with Rule

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410 ARIZONA v. CALIFORNIA
Opinion of the Court
“[W]hile the technical rules of preclusion are not strictly
applicable [in the context of a single ongoing original action],
the principles upon which these rules are founded should in-
form our decision.” Arizona II, 460 U. S., at 619. Those
principles rank res judicata an affirmative defense ordinarily
lost if not timely raised. See Fed. Rule Civ. Proc. 8(c).
Counsel for the State parties conceded at oral argument that
“no preclusion argument was made with respect to boundary
lands” in the proceedings leading up to Arizona II, and that
“after this Court’s decision in Arizona II and after the
Court’s later decision in [Nevada v. United States, 463 U. S.
110 (1983)], the light finally dawned on the State parties that
there was a valid preclusion—or res judicata argument here
with respect to Fort Yuma.” Tr. of Oral Arg. 46–47. We
disapprove the notion that a party may wake up because a
“light finally dawned,” years after the first opportunity to
raise a defense, and effectively raise it so long as the party
was (though no fault of anyone else) in the dark until its
late awakening.
The State parties assert that our prior pronouncements in
this case have expressly recognized the possibility that fu-
ture boundary lands claims for the Fort Yuma Reservation
might be precluded. If anything, the contrary is true.
Nothing in the Arizona II decision hints that the Court be-
lieved the boundary lands issue might ultimately be held pre-
cluded. Rather, the Court expressly found it “necessary to
decide whether any or all of these boundary disputes have
been ‘finally determined’ within the meaning of Article
8(c), the preclusion defense could have been raised. No such supplemen-
tal pleading was ever presented, and by 1989 a reasonable time to do so
had surely expired.
The State parties’ tardiness in raising their preclusion defense is hard
to account for, while the United States’ decision not to assert claims for
the disputed boundary lands until 1978 can at least be explained by the
continued vitality of the Margold Opinion, see supra, at 402. It is puz-
zling that the dissent should go to such lengths to excuse the former delay
while relentlessly condemning the latter.

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II(D)(5) . . . .” 460 U. S., at 631 (emphasis added). That
Arizona II contains no discussion of preclusion with respect
to the disputed lands is hardly surprising, given that the
State parties neglected to raise that issue until six years
later.
The Court did note in Arizona II that in the District
Court proceedings the United States had asserted defenses
based on “lack of standing, the absence of indispensable par-
ties, sovereign immunity, and the applicable statute of limita-
tions,” and added that “[t]here will be time enough, if any of
these grounds for dismissal are sustained and not over-
turned on appellate review, to determine whether the bound-
ary issues foreclosed by such [lower court] action are never-
theless open for litigation in this Court.” 460 U. S., at 638
(emphasis added). This passage, however, is most sensibly
read to convey that the defenses just mentioned—standing,
indispensable parties, sovereign immunity, and the statute of
limitations—would not necessarily affect renewed litigation
in this Court. The passage contains no acknowledgment,
express or implied, of a lurking preclusion issue stemming
from our Arizona I disposition.
Moreover, and of large significance, the 1979 and 1984 sup-
plemental decrees anticipated that the disputed boundary is-
sues for all five reservations, including the Fort Yuma Reser-
vation, would be “finally determined” in some forum, not by
preclusion but on the merits. See 1984 Supplemental De-
cree, Art. II(D)(5), Arizona v. California, 466 U. S., at 145
(Water rights for all five reservations “shall be subject to
appropriate adjustments by agreement or decree of this
Court in the event that the boundaries of the respective
reservations are finally determined.”); 1979 Supplemental
Decree, Art. II(D)(5), Arizona v. California, 439 U. S., at
421 (same).
The State parties themselves stipulated to the terms of
the supplemental decree we entered in 1979. They also ap-
pear to have litigated the Arizona II proceedings on the un-

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Opinion of the Court
derstanding that the boundary disputes should be resolved
on the merits. See 460 U. S., at 634 (“[The State parties]
argued . . . that the boundary controversies were ripe for
judicial review, and they urged the Special Master to receive
evidence, hear legal arguments, and resolve each of the
boundary disputes, but only for the limited purpose of estab-
lishing additional Indian water rights, if any.”); Report of
Special Master Tuttle, O. T. 1981, No. 8 Orig., p. 57 (describ-
ing the State parties’ contention “that the boundaries [of all
five reservations] have not been finally determined and that
I should make a de novo determination of the boundaries for
recommendation to the Court”). As late as 1988, the State
parties asked the Court to appoint a new Special Master and
direct him “to conclude his review of the boundary issues
as expeditiously as possible and to submit a recommended
decision to the Court.” Brief for Petitioners in California
v. United States, O. T. 1987, No. 87–1165, p. 49.
Finally, the State parties argue that even if they earlier
failed to raise the preclusion defense, this Court should raise
it now sua sponte. Judicial initiative of this sort might be
appropriate in special circumstances. Most notably, “if a
court is on notice that it has previously decided the issue
presented, the court may dismiss the action sua sponte, even
though the defense has not been raised. This result is fully
consistent with the policies underlying res judicata: it is not
based solely on the defendant’s interest in avoiding the bur-
dens of twice defending a suit, but is also based on the avoid-
ance of unnecessary judicial waste.” United States v. Sioux
Nation, 448 U. S. 371, 432 (1980) (Rehnquist, J., dissenting)
(citations omitted). That special circumstance is not present
here: While the State parties contend that the Fort Yuma
boundary dispute could have been decided in Arizona I, this
Court plainly has not “previously decided the issue pre-
sented.” Therefore we do not face the prospect of redoing
a matter once decided. Where no judicial resources have
been spent on the resolution of a question, trial courts must

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be cautious about raising a preclusion bar sua sponte,
thereby eroding the principle of party presentation so basic
to our system of adjudication.
In view of the State parties’ failure to raise the preclusion
argument earlier in the litigation, despite ample opportunity
and cause to do so, we hold that the claims of the United
States and the Tribe to increased water rights for the dis-
puted boundary lands of the Fort Yuma Reservation are not
foreclosed by our decision in Arizona I.
B
The State parties also assert that the instant water rights
claims are precluded by the 1983 consent judgment in the
Claims Court proceeding, Docket No. 320. Special Master
McGarr agreed, noting the consent judgment’s declaration
that the Tribe would “be barred thereby from asserting any
further rights, claims or demands against the defendant and
any future action encompassed on docket no. 320.” See Spe-
cial Master McGarr Memorandum Opinion and Order No. 4,
at 9–10. On reconsideration, the Special Master provided a
fuller account of his recommendation. The settlement, he
concluded, had extinguished the Tribe’s claim to title in the
disputed boundary lands, vesting that title in the United
States against all the world: “The only viable basis for a
damage or trespass claim [in Docket No. 320] was that the
1893 taking was illegal and that title therefore remained
with the Tribe. When the Tribe accepted money in settle-
ment of this claim, it relinquished its claim to title.” Id.,
No. 7, at 5 (May 5, 1992). See also id., No. 13, at 3 (Apr. 13,
1993) (“[T]he relinquishment of all future claims regarding
the subject matter of Docket No. 320 in exchange for a sum
of money extinguished the Tribe’s title in the subject
lands . . . .”). Because the settlement extinguished the
Tribe’s title to the disputed boundary lands, the Master rea-
soned, the United States and the Tribe cannot now seek addi-

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414 ARIZONA v. CALIFORNIA
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tional water rights based on the Tribe’s purported beneficial
ownership of those lands.
Under standard preclusion doctrine, the Master’s recom-
mendation cannot be sustained. As already noted, the ex-
press terms of the consent judgment in Docket No. 320
barred the Tribe and the United States from asserting
against each other any claim or defense they raised or could
have raised in that action. See supra, at 405. As between
the parties to Docket No. 320, then, the settlement indeed
had, and was intended to have, claim-preclusive effect—a
matter the United States and the Tribe readily concede.
Exception and Brief for United States 36; Exception and
Brief for Quechan Indian Tribe 20. But settlements ordi-
narily occasion no issue preclusion (sometimes called collat-
eral estoppel), unless it is clear, as it is not here, that the
parties intend their agreement to have such an effect. “In
most circumstances, it is recognized that consent agreements
ordinarily are intended to preclude any further litigation on
the claim presented but are not intended to preclude further
litigation on any of the issues presented. Thus consent
judgments ordinarily support claim preclusion but not issue
preclusion.” 18 C. Wright, A. Miller, & E. Cooper, Federal
Practice and Procedure § 4443, pp. 384–385 (1981). This dif-
ferentiation is grounded in basic res judicata doctrine. It is
the general rule that issue preclusion attaches only “[w]hen
an issue of fact or law is actually litigated and determined
by a valid and final judgment, and the determination is es-
sential to the judgment.” Restatement (Second) of Judg-
ments § 27, p. 250 (1982). “In the case of a judgment entered
by confession, consent, or default, none of the issues is actu-
ally litigated. Therefore, the rule of this Section [describing
issue preclusion’s domain] does not apply with respect to any
issue in a subsequent action.” Id., comment e, at 257.
This Court’s decision in United States v. International
Building Co., 345 U. S. 502 (1953), is illustrative. In 1942,
the Commissioner of Internal Revenue assessed deficiencies

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against a taxpayer for the taxable years 1933, 1938, and 1939,
alleging that the taxpayer had claimed an excessive basis
for depreciation. Id., at 503. After the taxpayer filed for
bankruptcy, however, the Commissioner and the taxpayer
filed stipulations in the pending Tax Court proceedings stat-
ing that there was no deficiency for the taxable years
in question, and the Tax Court entered a formal decision to
that effect. Id., at 503–504. In 1948, the Commissioner as-
sessed deficiencies for the years 1943, 1944, and 1945, and the
taxpayer defended on the ground that the earlier Tax Court
decision was preclusive on the issue of the correct basis for
depreciation. We disagreed, holding that the Tax Court de-
cision, entered pursuant to the parties’ stipulations, did not
accomplish an “estoppel by judgment,” i. e., it had no issue-
preclusive effect:
“We conclude that the decisions entered by the Tax
Court for the years 1933, 1938, and 1939 were only a
pro forma acceptance by the Tax Court of an agreement
between the parties to settle their controversy for rea-
sons undisclosed . . . . Perhaps, as the Court of Appeals
inferred, the parties did agree on the basis for deprecia-
tion. Perhaps the settlement was made for a different
reason, for some exigency arising out of the bankruptcy
proceeding. As the case reaches us, we are unable to
tell whether the agreement of the parties was based on
the merits or on some collateral consideration. Cer-
tainly the judgments entered are res judicata of the tax
claims for the years 1933, 1938, and 1939, whether or not
the basis of the agreements on which they rest reached
the merits . . . . Estoppel by judgment includes matters
in a second proceeding which were actually presented
and determined in an earlier suit. A judgment entered
with the consent of the parties may involve a determina-
tion of questions of fact and law by the court. But un-
less a showing is made that that was the case, the judg-
ment has no greater dignity, so far as collateral estoppel

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is concerned, than any judgment entered only as a
compromise of the parties.” Id., at 505–506 (citations
omitted).
The State parties, perhaps recognizing the infirmity of
their argument as a matter of standard preclusion doctrine,
assert that common-law principles of issue preclusion do not
apply in the special context of Indian land claims. Instead,
they argue, § 22 of the Indian Claims Commission Act cre-
ated a special regime of “statutory preclusion.” 5 According
to the State parties, the payment of a Commission judgment
for claims to aboriginal or trust lands automatically and uni-
versally extinguishes title to the Indian lands upon which
the claim is based and creates a statutory bar to further as-
sertion of claims against either the United States or third
parties based on the extinguished title. The State parties
point to several decisions of the Ninth Circuit in support of
this contention. See Reply Brief for State Parties 17 (citing
United States v. Pend Oreille Pub. Util. Dist. No. 1, 926 F. 2d
1502 (CA9 1991)); Reply Brief for State Parties 15 (citing
United States v. Dann, 873 F. 2d 1189 (CA9 1989)); Reply
Brief for State Parties 11 (citing United States v. Gemmill,
535 F. 2d 1145 (CA9 1976)).
We need not decide whether, in the distinctive context of
the Indian Claims Commission Act, some consent judgments
5 Section 22 provided:
“(a) When the report of the Commission determining any claimant to
be entitled to recover has been filed with Congress, such report shall have
the effect of a final judgment of the Court of Claims, and there is author-
ized to be appropriated such sums as are necessary to pay the final deter-
mination of the Commission.
“The payment of any claim, after its determination in accordance with
this chapter, shall be a full discharge of the United States of all claims and
demands touching any of the matters involved in the controversy.
“(b) A final determination against a claimant made and reported in ac-
cordance with this chapter shall forever bar any further claim or demand
against the United States arising out of the matter involved in the contro-
versy.” 25 U. S. C. § 70u (1976 ed.).

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might bar a tribe from asserting title even in discrete litiga-
tion against third parties, for the 1983 settlement of Docket
No. 320 plainly could not qualify as such a judgment. Not
only was the issue of ownership of the disputed boundary
lands not actually litigated and decided in Docket No. 320,
but, most notably, the Tribe proceeded on alternative and
mutually exclusive theories of recovery. Had the case pro-
ceeded to final judgment upon trial, the Tribe might have
won damages for a taking, indicating that title was in the
United States. Alternatively, however, the Tribe might
have obtained damages for trespass, indicating that title re-
mained in the Tribe. The consent judgment embraced all of
the Tribe’s claims. There was no election by the Tribe of
one theory over the other, nor was any such election required
to gain approval for the consent judgment. The Special
Master’s assumption that the settlement necessarily and uni-
versally relinquished the Tribe’s claim to title was thus un-
warranted. Certainly, if the $15 million payment consti-
tuted a discharge of the Tribe’s trespass claim, it would make
scant sense to say that the acceptance of the payment extin-
guished the Tribe’s title. In contrast, the Ninth Circuit
cases cited by the State parties (the correctness of which we
do not address) all involved Indian Claims Commission Act
petitions in which tribes claimed no continuing title, choosing
instead to seek compensation from the United States for the
taking of their lands. See, e. g., Pend Oreille, 926 F. 2d, at
1507–1508; Dann, 873 F. 2d, at 1192, 1194; Gemmill, 535 F. 2d,
at 1149, and n. 6.
The United States invites us to look behind the consent
judgment in Docket No. 320 at presettlement stipulations
and memoranda purportedly demonstrating that the judg-
ment was grounded on the parties’ shared view, after the
1978 Secretarial Order, that the disputed lands belong to the
Tribe. We need not accept the Government’s invitation.
On the matter of issue preclusion, it suffices to observe that
the settlement was ambiguous as between mutually exclu-

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sive theories of recovery. Like the Tax Court settlement in
International Building Co., then, the consent judgment in
the Tribe’s Claims Court action is too opaque to serve as a
foundation for issue preclusion. Accordingly, we hold that
the claims of the United States and the Tribe to increased
water rights for the disputed boundary lands of the Fort
Yuma Reservation are not precluded by the consent judg-
ment in Docket No. 320.
C
The Special Master has recommended that the Court ap-
prove the parties’ proposed settlement of the dispute re-
specting the Fort Mojave Reservation. The claim to addi-
tional water for the Fort Mojave Reservation arises out of a
dispute over the accuracy of a survey of the so-called Hay
and Wood Reserve portion of the Reservation. See Ari-
zona II, 460 U. S., at 631–632. The parties agreed to resolve
the matter through an accord that (1) specifies the location of
the disputed boundary; (2) preserves the claims of the parties
regarding title to and jurisdiction over the bed of the last
natural course of the Colorado River within the agreed-upon
boundary; (3) awards the Tribe the lesser of an additional
3,022 acre-feet of water or enough water to supply the needs
of 468 acres; (4) precludes the United States and the Tribe
from claiming additional water rights from the Colorado
River for lands within the Hay and Wood Reserve; and (5)
disclaims any intent to affect any private claims to title to or
jurisdiction over any lands. See McGarr Report 8–9 (July
28, 1999). We accept the Master’s uncontested recommen-
dation and approve the proposed settlement.
The Master has also recommended that the Court approve
the parties’ proposed settlement of the dispute respecting
the Colorado River Indian Reservation. The claim to addi-
tional water for that reservation stems principally from a
dispute over whether the reservation boundary is the ambu-
latory west bank of the Colorado River or a fixed line repre-

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senting a past location of the River. See Arizona II, 460
U. S., at 631. The parties agreed to resolve the matter
through an accord that (1) awards the Tribes the lesser of an
additional 2,100 acre-feet of water or enough water to irri-
gate 315 acres; (2) precludes the United States or the Tribe
from seeking additional reserved water rights from the Colo-
rado River for lands in California; (3) embodies the parties’
intent not to adjudicate in these proceedings the correct loca-
tion of the disputed boundary; (4) preserves the competing
claims of the parties to title to or jurisdiction over the bed
of the Colorado River within the reservation; and (5) pro-
vides that the agreement will become effective only if the
Master and the Court approve the settlement. See McGarr
Report 9–10. The Master expressed concern that the settle-
ment does not resolve the location of the disputed boundary,
but recognized that it did achieve the ultimate aim of deter-
mining water rights associated with the disputed boundary
lands. Id., at 10–12, 13–14. We again accept the Master’s
recommendation and approve the proposed settlement.6
* * *
For the foregoing reasons, we remand the outstanding
water rights claims associated with the disputed boundary
6 A group called the West Bank Homeowners Association has filed a
brief amicus curiae objecting to the proposed settlement of water rights
claims respecting the Colorado River Indian Reservation. The Associa-
tion represents some 650 families who lease property from the United
States within the current boundaries of the Reservation. The Court and
the Special Master have each denied the Association’s request to intervene
in these proceedings. See Arizona v. California, 514 U. S. 1081 (1995);
Special Master McGarr Memorandum Opinion and Order No. 17 (Mar. 29,
1995). The Master observed that the Association’s members do “not own
land in the disputed area and [the Association] makes no claim to title or
water rights,” id., at 2, thus their interests will “not be impeded or
impaired by the outcome of this litigation,” id., at 6. Accordingly, we do
not further consider the Association’s objections.

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420 ARIZONA v. CALIFORNIA
Appendix to opinion of the Court
lands of the Fort Yuma Indian Reservation to the Special
Master for determination on the merits. Those claims are
the only ones that remain to be decided in Arizona v. Cali-
fornia; their resolution will enable the Court to enter a final
consolidated decree and bring this case to a close.
With respect to the Fort Mojave and Colorado River Res-
ervations, the Special Master has submitted a proposed sup-
plemental decree to carry the parties’ accords into effect.
That decree is reproduced as the Appendix to this opinion,
infra this page and 421–422. The parties are directed to
submit to the Clerk of this Court, before August 22, 2000,
any objections to the proposed supplemental decree.
It is so ordered.
APPENDIX TO OPINION OF THE COURT
Proposed Supplemental Decree
It is ORDERED, ADJUDGED, AND DECREED:
A. Paragraph (4) of Article II(D) of the Decree in this
case entered on March 9, 1964 (376 U. S. 340, 344–345) is
hereby amended to read as follows:
(4) The Colorado River Indian Reservation in annual
quantities not to exceed (i) 719,248 acre-feet of diver-
sions from the mainstream or (ii) the quantity of main-
stream water necessary to supply the consumptive use
required for irrigation of 107,903 acres and for the satis-
faction of related uses, whichever of (i) or (ii) is less,
with priority dates of March 3, 1865, for lands reserved
by the Act of March 3, 1865 (13 Stat. 541, 559); Novem-
ber 22, 1873, for lands reserved by the Executive Order
of said date; November 16, 1874, for lands reserved by
the Executive Order of said date, except as later modi-
fied; May 15, 1876, for lands reserved by the Executive
Order of said date; November 22, 1915, for lands re-
served by the Executive Order of said date.

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Appendix to opinion of the Court
B. Paragraph (5) of Article II(D) of the Decree in this case
entered on March 9, 1964 (376 U. S. 340, 345) and supple-
mented on April 16, 1984 (466 U. S. 144, 145) is hereby
amended to read as follows:
(5) The Fort Mojave Indian Reservation in annual quan-
tities not to exceed (i) 132,789 acre-feet of diversions
from the mainstream or (ii) the quantity of mainstream
water necessary to supply the consumptive use required
for irrigation of 20,544 acres and for the satisfaction of
related uses, whichever of (i) or (ii) is less, with priority
dates of September 19, 1890, for lands transferred by
the Executive Order of said date; February 2, 1911, for
lands reserved by the Executive Order of said date.
C. Paragraph (5) of the introductory conditions to the Sup-
plemental Decree in this case entered on January 9, 1979
(439 U. S. 419, 421–423) is hereby amended by adding the
following exception at the end of the concluding proviso in
the first sentence of that paragraph: “except for the western
boundaries of the Fort Mojave and Colorado River Indian
Reservations in California.”
D. Paragraph II(A)(24) of the Decree of January 9, 1979 (439
U. S. 419, 428) is hereby amended to read as follows:
24)
Colorado River Indian Reservation 10,745 1,612 Nov. 22, 1873
40,241 6,037 Nov. 16, 1874
5,860 879 May 15, 1876
E. Paragraph II(A)(25) of the Decree of January 9, 1979 (439
U. S. 419, 428) is hereby amended to read as follows:
25)
Fort Mojave Indian Reservation 16,720 2,587 Sept. 18, 1890
F. Except as otherwise provided herein, the Decree entered
on March 9, 1964, and the Supplemental Decrees entered on
January 9, 1979, and April 16, 1984, shall remain in full force
and effect.

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422 ARIZONA v. CALIFORNIA
Opinion of Rehnquist, C. J.
G. The Court shall retain jurisdiction herein to order such
further proceedings and enter such supplemental decree as
may be deemed appropriate.
Chief Justice Rehnquist, with whom Justice O’Con-
nor and Justice Thomas join, concurring in part and dis-
senting in part.
I believe that the United States’ and the Quechan Tribe’s
claim for additional water rights is barred by the principles
of res judicata, and therefore I dissent. The Special Master
concluded that an exception to the general preclusion rule
applied and that, therefore, the United States’ claim was not
barred. The Court rejects the Special Master’s reasoning
but concludes that the State parties’ res judicata defense is
not properly before the Court. While I agree that the Spe-
cial Master erred in finding the 1978 order of the Secretary
of the Interior a “new fact” justifying an exception to the
application of preclusion, I disagree with the Court’s refusal
to reach the merits of the State parties’ defense.
The Court first concludes that the State parties lost the
defense because they failed to assert it in a timely manner.
While the State parties concede that they did not raise their
claim of res judicata until 1989, it does not automatically fol-
low that the defense is lost. Federal Rule of Civil Proce-
dure 8(c) provides that res judicata shall be pleaded as an
affirmative defense. But the only “pleadings” in this case
were filed in the 1950’s, at which time no claim of res judicata
could have been made. The motions filed by the State par-
ties in 1977 and 1979 were not in any sense comprehensive
pleadings, purporting to set forth all of the claims and de-
fenses of the parties. More importantly, neither Special
Master Tuttle nor this Court focused on the merits of the
boundary dispute during the proceedings in Arizona v. Cali-
fornia, 460 U. S. 605 (1983) (Arizona II). Rather, the Mas-
ter only decided whether the Secretary’s order was a final
boundary determination, and, similarly, this Court simply de-

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Opinion of Rehnquist, C. J.
termined that the Secretary’s order was subject to challenge
and encouraged the parties to assert their legal claims and
defenses in another forum. Consequently, it is likely that
the State parties’ res judicata claim would not have been
resolved in Arizona II even if it had been raised.
The State parties did expressly raise the defense of res
judicata in their 1989 motion, and neither the United States
nor the Tribe objected to its consideration. The Tribe con-
tested the merits of the State parties’ res judicata claim and
argued that its water rights’ claim was not precluded. In
so doing, the Tribe asserted that the State parties had not
argued res judicata during the Arizona II proceedings.
But neither the Tribe nor the United States contended, in
response to the State parties’ motion, that the Court could
not decide the res judicata issue because it was not timely
raised. We granted the motion, and Special Master McGarr
considered the claim on the merits. Under these circum-
stances, I believe that the State parties did not lose their
res judicata defense by failing to assert it in the earlier
proceedings.
The Court also concludes that this Court’s 1979 and 1984
supplemental decrees “anticipated” that the boundary dis-
pute would be finally resolved in some forum. See ante, at
411. To reach this conclusion, the Court reads too much into
the simple language of the supplemental decrees and ignores
language in our Arizona II opinion. The supplemental de-
crees stated that water rights for the five reservations “shall
be subject to appropriate adjustments by agreement or
decree of this Court in the event that the boundaries of
the respective reservations are finally determined.” 1984
Supplemental Decree, Art. II(D)(5), Arizona v. California,
466 U. S. 144, 145 (1984); 1979 Supplemental Decree, Art.
II(D)(5), Arizona v. California, 439 U. S. 419, 421 (1979) (per
curiam). These decrees can best be interpreted as merely
providing that the reservation’s water quantity can be ad-
justed if the boundary changes, without deciding whether

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the boundary relied on in the 1964 decree could be properly
challenged, and without indicating that the boundary neces-
sarily would be “finally determined” at some future point.
This reading is supported by language in Arizona II. In
discussing the pending District Court action, we explained:
“We note that the United States has moved to dismiss the
action filed by the agencies based on lack of standing, the
absence of indispensable parties, sovereign immunity, and
the applicable statute of limitations. There will be time
enough, if any of these grounds for dismissal are sustained
and not overturned on appellate review, to determine
whether the boundary issues foreclosed by such action are
nevertheless open for litigation in this Court.” 460 U. S.,
at 638 (emphasis added; footnote omitted). As is evident
from this language, we did not “anticipate” that the dispute
would be finally resolved. Instead, we explicitly left open
the question whether the dispute could be litigated in this
Court.
The Court disregards this language in Arizona II because
it does not mention a potential preclusion defense. How-
ever, the point is not that this Court anticipated the State
parties’ preclusion defense. Rather, it is that this Court rec-
ognized the possibility that the boundary issue would not be
judicially resolved at all, and left open the question whether
there was some defense precluding this Court’s review.
What that defense might be was not before the Court.
Now that the question is squarely before us, I would hold
that the United States’ claim for additional water rights is
barred by the principles of res judicata. Res judicata not
only bars relitigation of claims previously litigated, but also
precludes claims that could have been brought in earlier pro-
ceedings. Under the doctrine of res judicata, “when a final
judgment has been entered on the merits of a case, ‘[i]t is a
finality as to the claim or demand in controversy, concluding
parties and those in privity with them, not only as to every
matter which was offered and received to sustain or defeat

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the claim or demand, but as to any other admissible matter
which might have been offered for that purpose.” Nevada
v. United States, 463 U. S. 110, 129–130 (1983) (quoting Crom-
well v. County of Sac, 94 U. S. 351, 352 (1877)).
In Arizona II, we recognized that the general principles of
res judicata apply to our 1964 decree even though the decree
expressly provided for modification in appropriate circum-
stances. In so doing, we noted the importance of the cer-
tainty of water rights in the Western United States. “A
major purpose of this litigation, from its inception to the
present day, has been to provide the necessary assurance to
States of the Southwest and to various private interests, of
the amount of water they can anticipate to receive from the
Colorado River system. . . . If there is no surplus of water in
the Colorado River, an increase in federal reserved water
rights will require a ‘gallon-for-gallon reduction in the
amount of water available for water-needy state and private
appropriators.’ ” 460 U. S., at 620–621 (quoting United
States v. New Mexico, 438 U. S. 696, 699 (1978)). Thus, we
concluded that allowing recalculation of the amount of practi-
cably irrigable acreage “runs directly counter to the strong
interest in finality in this case.” 460 U. S., at 620. We also
noted that treating the 1964 calculation as final comported
with the clearly expressed intention of the parties and
was consistent with our previous treatment of original ac-
tions, allowing modifications after a change in the relevant
circumstances.
This reasoning is equally applicable to the United States’
and the Tribe’s claim for additional water for the disputed
boundary lands. Even though the exact claim was not actu-
ally litigated in Arizona v. California, 373 U. S. 546 (1963)
(Arizona I), the United States could have raised the bound-
ary claim and failed to do so. Indeed, in the proceedings
before Special Master Rifkind, the counsel for the United
States affirmatively represented that “[t]he testimony . . . as
reflected by these maps and by the other testimony will de-

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fine the maximum claim which the United States is asserting
in this case.” Earlier in the proceedings, the Master explic-
itly warned the United States about the preclusive effect of
failing to assert potential claims: “In an action or a decree
quieting title, you cut out all claims not asserted. . . . I just
want you to be aware of the fact that the mere fact that it
has not been asserted does not mean that you may not lose
it . . . .” Exception by State Parties to Report of Special
Master and Supporting Brief 8–9 (colloquy between counsel
for the United States and the Special Master). Thus, under
the general principles of res judicata, the United States
would clearly be barred from now asserting the claim for
additional water rights.
Special Master McGarr concluded that the United States’
claim was not precluded because it fell within an exception
to the bar of res judicata. Wisely abandoning the Master’s
reasoning, the United States instead defends the Master’s
ruling on the ground that these claims “are not precluded,
under basic principles of res judicata, because [they] were
not decided, and could not have been decided, in the prior
proceedings.” Reply Brief for United States in Response
to Exception of State Parties 21. But this argument fares
no better.
The issue before the Master in Arizona I was the amount
of water from the Colorado River to which the Quechan
Tribe was entitled. The Master made an allotment to the
reservation based on the evidence then before him as to the
amount of irrigable acreage within the reservation boundary,
which was undisputed at the time. Only years after that
decree was confirmed by this Court in Arizona I did the
United States assert a larger claim to water for the reserva-
tion based on a claim for a larger amount of irrigable acre-
age—not because of a miscalculation as to the irrigability of
acreage already claimed, but because of a claimed extension
of the boundaries of the reservation. But, at the time of
Arizona I, the United States had in its possession all of

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the facts that it later asserted in 1979 in Arizona II, and it
could have litigated the larger claim before Special Master
Rifkind.
The United States offers no support for its contention that
the boundary dispute could not have been decided in Ari-
zona I except for the fact that this Court rejected the Mas-
ter’s resolution of the Fort Mojave Reservation and Colo-
rado River Reservation boundary disputes. However, those
boundary disputes are different. While we did not explain
in Arizona I why we believed it was improper to decide the
boundary disputes, California’s objection was based on the
fact that necessary parties were not participating in the pro-
ceedings. Specifically, California argued that it lacked the
authority to represent private individuals claiming title to
the disputed lands and maintained that “it would be unfair
to prejudice any of the parties in future litigation over land
titles or political jurisdiction by approving findings on a tan-
gential issue never pleaded by the United States.” Arizona
II, supra, at 629. The Fort Yuma Reservation boundary
dispute, on the other hand, is solely between the United
States and the Quechan Tribe—there are no private parties
claiming title to the land. Thus, the United States could
have raised this claim in Arizona I, and the Master could
have decided it.
Because I believe that the State parties’ res judicata de-
fense is properly before the Court and that the United
States’ claim for additional water rights is precluded, I see
no need to remand for further proceedings. I agree with
the Court that we should approve the proposed settlements
of the remaining claims in this case and direct the parties to
submit any objections to the proposed supplemental decree.