## Facts

- Colorado enacted a comprehensive statutory system (1969) for adjudicating water rights, dividing the state into seven water divisions with specialized state water courts and administrative officials.
- The United States sued in federal district court under 28 U.S.C. § 1345 (and also asserted federal-question jurisdiction) seeking adjudication of federal and Indian reserved water rights in rivers within Water Division No. 7 and naming roughly 1,000 water users.
- After the federal filing, a defendant initiated steps in the state Division 7 water court to join the United States in the ongoing state-wide adjudication, relying on the McCarran Amendment, 43 U.S.C. § 666.
- The federal district court dismissed the federal suit on abstention grounds.
- The Tenth Circuit reversed, concluding jurisdiction existed and abstention was improper.
- The Supreme Court granted certiorari to determine the effect of the McCarran Amendment and whether dismissal in favor of concurrent state proceedings was permissible.

## Issues

1. Whether the McCarran Amendment divests federal district courts of jurisdiction under 28 U.S.C. § 1345 over suits brought by the United States to adjudicate federal and Indian reserved water rights.
2. Whether a federal district court may stay or dismiss a case in favor of parallel state proceedings, and if so, under what limits, given the general duty to exercise properly conferred jurisdiction.

## Decision

- The Supreme Court reversed the Tenth Circuit (6–3) and upheld dismissal of the federal action in favor of the state proceedings.
- The McCarran Amendment did not strip § 1345 jurisdiction; it consented to concurrent state jurisdiction over comprehensive water-rights adjudications involving the United States.
- The McCarran Amendment permits state-court adjudication of Indian reserved water rights, and state adjudication does not, by itself, violate the federal government’s obligation to protect tribes.
- Although traditional abstention doctrines did not apply, a narrow, separate doctrine allows dismissal or a stay in “exceptional circumstances” for reasons of wise judicial administration.
- Exceptional circumstances existed because Colorado’s system sought comprehensive adjudication of an entire river system, and parallel federal litigation risked piecemeal, inconsistent results; additional considerations included the state proceeding’s effective control over the water-rights res, relative convenience, and the order and progress of the proceedings.

## Legal Principles

- Federal courts generally have a “virtually unflagging obligation” to exercise jurisdiction conferred by Congress.
- The McCarran Amendment waives federal sovereign immunity and authorizes joinder of the United States in state proceedings for adjudication and administration of water rights, creating concurrent jurisdiction rather than eliminating federal jurisdiction.
- Indian reserved water rights may be adjudicated in state McCarran Amendment proceedings without per se impairment of those rights.
- A federal court may stay or dismiss a case due to parallel state proceedings only in exceptional circumstances, under a limited doctrine grounded in conservation of judicial resources and comprehensive disposition of litigation, not under traditional abstention categories.
- Factors informing the exceptional-circumstances analysis include: (1) whether either court has assumed jurisdiction over property or a res, (2) relative inconvenience of the federal forum, (3) the desirability of avoiding piecemeal litigation (especially in river-system water rights), and (4) the order and relative progress of the proceedings.

## Conclusion

The Court held that the McCarran Amendment preserves federal jurisdiction while permitting concurrent state adjudication, and it recognized a narrow exception allowing federal courts to stay or dismiss parallel litigation only when exceptional circumstances justify deferring to a comprehensive state proceeding, particularly to prevent piecemeal adjudication of water rights.


Colorado River Water Conservation District v. United States, 424 U.S. 800 (1976)