## Facts

- Escondido Mutual Water Company, with municipal partners, operated hydroelectric and water-diversion facilities drawing from the San Luis Rey River in Southern California.
- The project’s diversion point was within the La Jolla Reservation; a canal crossed the La Jolla, Rincon, and San Pasqual Reservations; and a powerhouse sat on the Rincon Reservation.
- The Federal Power Act (FPA) authorizes the Federal Energy Regulatory Commission (FERC) to license hydroelectric “project works” on federal reservations, including Indian trust lands, and provides that licenses “within any reservation” must not interfere with reservation purposes and must contain conditions the supervising Secretary deems necessary to protect and use the reservation.
- The Mission Indian Relief Act of 1891 (MIRA) created several Mission Indian reservations and allows rights-of-way contracts across reservation lands only if approved by the Secretary of the Interior on conditions the Secretary may impose.
- When the existing federal power license neared expiration, Escondido Mutual and the City of Escondido sought a new FERC license; the Secretary sought federal takeover; and several Mission Indian Bands sought a non-power license for facilities on their lands.
- An Administrative Law Judge concluded FERC lacked licensing jurisdiction, but FERC reversed and issued a license to Escondido Mutual, the City, and Vista Irrigation District.
- In issuing the license, FERC (1) modified or declined to adopt certain Interior conditions, (2) treated § 4(e) reservation findings/conditions as limited to reservations physically occupied by project works, and (3) rejected claims that MIRA required separate tribal consent or rights-of-way as a precondition to licensing.
- The Ninth Circuit reversed FERC, holding Interior’s § 4(e) conditions were binding without modification, § 4(e) extended to all affected reservations (including those without project works), and MIRA § 8 required rights-of-way/consent before licensing.

## Issues

1. Whether FPA § 4(e) requires FERC to include, without modification, reservation-protection conditions the Secretary of the Interior deems necessary for a project licensed “within any reservation.”
2. Whether § 4(e)’s non-interference finding and mandatory Secretary conditions apply only to reservations where licensed project works are located, or also to reservations indirectly affected by the project.
3. Whether MIRA § 8 requires tribal consent or separate rights-of-way permits as a condition precedent to issuance of an FERC hydropower license.

## Decision

- The Supreme Court held that, for projects licensed “within” an Indian reservation, FERC must include in the license, without modification, those conditions the Secretary of the Interior deems necessary for the adequate protection and utilization of that reservation.
- The Court held that § 4(e)’s “within any reservation” proviso applies only to reservations on which licensed project works are physically located, not to other reservations merely affected by diversions or other indirect impacts.
- The Court held that MIRA § 8 does not impose an independent tribal-consent or rights-of-way prerequisite that can block or condition FERC licensing under the FPA.
- The Court affirmed in part and reversed in part the Ninth Circuit and remanded for further proceedings consistent with its interpretation.

## Legal Principles

- When an FPA license is issued for project works located within an Indian reservation, the license must “be subject to and contain” the Secretary’s reservation-protection conditions; FERC lacks discretion to revise qualifying conditions.
- The Secretary’s § 4(e) conditioning authority is tied to protecting and utilizing the reservation; conditions must be reasonably related to that purpose and remain subject to judicial review.
- The § 4(e) reservation-specific obligations are triggered by the location of licensed “project works” on the reservation; indirect effects on other reservations do not extend § 4(e)’s mandatory conditions and findings to those reservations.
- MIRA § 8 governs the validity of contracts for rights-of-way across reservation lands via Secretarial approval and does not create an additional statutory tribal veto over the federal hydropower licensing scheme.

## Conclusion

The Court required FERC to incorporate Interior’s reservation-protective § 4(e) conditions as written for reservations hosting licensed project works, limited § 4(e) to those reservations, and rejected MIRA § 8 as a separate tribal-consent barrier to federal hydropower licensing.


Escondido Mut. Water Co. v. La Jolla Band of Mission Indians, 466 U.S. 765 (1984)