In 1963, the U.S. Supreme Court issued its decision in Arizona v. California, 373 U.S. 546. That decision expanded the Implied Reservation Doctrine first announced in Winters v. United States, 207 U.S. 564 (1908) to lands reserved by the United States for other than Indian reservation purposes, i.e., national forests. Until that time, the Forest Service and other federal land managers operated under the presumption that all water rights on National Forest lands had to be obtained under state law.

Then, in 1974, the Arizona Legislature passed a law requiring all surface water rights not granted under the State Water Code, covered by contract with the United States, court decree, or other adjudication or constituting a right to use of water from the main stem of the Colorado River to be claimed by filing such a claim with the State of Arizona. Three years later the Legislature passed a law requiring the registration of stock ponds of fifteen acre feet or less that did not otherwise have a water right or qualify for a pre-water-code claim. About this same time, various adjudication proceedings were filed in state courts in Arizona, primarily by mining companies seeking to avert protracted conflicts with Indian communities over water rights. These adjudications were subsequently combined into two large adjudications, one covering the Gila River and its tributaries and the other covering the Little Colorado River and its tributaries. Between them, these two adjudications encompassed most of the water uses within the State of Arizona, except for direct water use from the main stem of the Colorado River.

There ensued a period of enormous activity, requiring (1) the filing of water rights and claims with the state for those water uses not already recognized by decree, contract or state process, and (2) filing these newly-documented rights and claims as well as all others in the adjudication proceedings. Both federal land managers, including the Forest Service, and federal land users devoted considerable time to the documenting processes. Both before the decision in United States v. New Mexico in 1978 and after, substantial questions existed about how water rights could best be protected. Should the federal land agency file these documents, or should the actual user of the water, who was most often the holder of any available evidence of existence of the right at that time, do the filing? In many cases, both filed, creating a duplicate trail of paperwork covering the same water uses, sometimes with different information.

Over the years, as the adjudication processes have dragged on and have focused primarily on global issues concerning the validity of the process and the nature of proceedings, the Forest Service has apparently lost patience with the process and decided to use its permitting authority to capture or recapture water rights filed on National Forest lands by non-federal water users. The growing tension over this management decision has culminated in an exchange of correspondence between the Forest Service and the Director of the Arizona Department of Water Resources, attached to the Arizona case study, and in the passage of an amendment to Arizona law concerning the appropriation of water, as follows: