28 F.3d 1544
29 Fed.R.Serv.3d 733, 24 Envtl. L. Rep. 21,275
UNITED STATES of America, as trustee for the Kalispel Indian
Tribe and individual allottees, Plaintiff-Appellee,
and
Kalispel Indian Tribe, Intervening-Plaintiff,
v.
PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal
corp., Defendant,
and
Department of Natural Resources, State of Washington,
Defendant-Intervenor-Appellant.
UNITED STATES of America, as trustee for the Kalispel Indian
Tribe and individual allottees, Plaintiff-Appellee,
and
Kalispel Indian Tribe, Intervening-Plaintiff,
v.
PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal
corp., Defendant-Appellant,
and
Department of Natural Resources, State of Washington,
Defendant-Intervenor.
UNITED STATES of America, as trustee for the Kalispel Indian
Tribe and individual allottees, Plaintiff-Appellant,
and
Kalispel Indian Tribe, Intervening-Plaintiff,
v.
PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal
corp., Defendant-Appellee,
and
Department of Natural Resources, State of Washington,
Defendant-Intervenor.
UNITED STATES of America, as trustee for the Kalispel Indian
Tribe and individual allottees, Plaintiff,
and
Kalispel Indian Tribe, Intervening Plaintiff-Appellant,
v.
PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal
corp., Defendant-Appellee,
and
Department of Natural Resources, State of Washington,
Defendant-Intervenor-Appellee.
UNITED STATES of America, Plaintiff,
and
Kalispel Indian Tribe, Plaintiff-Intervenor-Appellant,
v.
PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal
corp., Defendant-Appellee,
and
Department of Natural Resources, State of Washington,
Defendant-Intervenor-Appellee.
Nos. 88-3617 through 88-3619, 88-3669, 92-35504.
United States Court of Appeals,
Ninth Circuit.
Argued and Submitted April 12, 1993.
Decided July 14, 1994.
Elizabeth Ann Peterson, U.S. Dept. of Justice, Washington, DC, for plaintiff-appellee-appellant.
Allen H. Sanders, Evergreen Legal Services, Seattle, WA, for plaintiff-intervenor-appellant.
Jerry K. Boyd, Spokane, WA, for defendant-appellant-appellee.
J. Lawrence Coniff, Asst. Atty. Gen., Olympia, WA, for defendant-intervenor-appellant-appellee.
Appeals from the United States District Court for the Eastern District of Washington.
Before: BROWNING, SCHROEDER, and FLETCHER, Circuit Judges.
JAMES R. BROWNING, Circuit Judge:
This is the second opinion of this court dealing with issues arising out of a judgment entered by the district court in an action brought by the United States on behalf of the Kalispel Indians against the Public Utility District No. 1 of Pend Oreille County, Washington. The Federal Power Commission issued a license to the Utility to build and operate the Box Canyon Dam on the Pend Oreille River, which forms the western boundary of the Kalispel Indian Reservation in northeastern Washington. The United States filed suit alleging the Utility had flooded Reservation land and seeking damages and injunctive relief. The Kalispel Indian Tribe and the State of Washington intervened. The Tribe joined the trespass claims advanced by the United States on its behalf. Both the Tribe and the State claimed title to the riverbed.
The district court divided the trial into three phases. In the first two phases, the court considered whether the Utility had flooded Reservation land and whether the Tribe or the State owned the bed of the river. In our first opinion, reported at 926 F.2d 1502, we sustained the district court's holdings that the Utility had trespassed upon the Reservation by raising the level of the river and that the State, rather than the Tribe, owned the bed of the river.
In the final phase of the trial, the district court considered the remedy for the Utility's trespass. On this appeal, the Utility repeats its contention that the district court erred in concluding the Utility had trespassed on Reservation land. The Utility also contends the court erred in dismissing its counterclaim in condemnation against the United States and the Tribe, refusing to grant declaratory relief regarding the calculation of future damages, and awarding prejudgment interest on the damage award. The Tribe and the United States argue the district court erred in failing to include the value of the land as part of the power project in determining the amount of damages, refusing to grant injunctive relief, and denying the Tribe leave to amend its complaint to allege a claim for water and fishing rights.
We adhere to our determination that the Utility trespassed on the Tribe's lands; we affirm the denial of the Utility's motion for declaratory relief and the Tribe's motion to amend its complaint; and we reverse the damage and prejudgment interest awards and the denial of injunctive relief.
I. LIABILITY FOR TRESPASS
The Utility argues there was no trespass because Article 33 of the project license authorizes the Utility to flood Reservation land and compensate the Tribe at the rate the Utility pays private land owners--the rental value of the land as grazing land. It is too late for the Utility to challenge the existence of a trespass. That question was resolved against its position by the district court, and we affirmed the district court's conclusion in our first opinion. During phase three of the trial, the district court found the Utility knew it had no right to flood Reservation land, but flooded it anyway, a finding supported by substantial evidence.
In any event, the Utility's interpretation of Article 33 is without merit. The language of Article 33 neither authorizes the Utility to flood Reservation land, nor specifies the amount of damages the Utility would owe the Kalispel Indians if it did. The first clause requires the Utility to operate the Dam in such "a manner as not to interfere with or damage Indian land of the [K]alispel Indian Reservation." The second clause provides an administrative procedure for compensating the Indians if the Utility breaches the prohibition against flooding Reservation land: "[I]n the case such damage should occur as a result of the operation of the project, the Indians shall be compensated in the manner and amount as determined by the Secretary, after consultation with the [K]alispel Indian Community Council and Licensee." Nothing indicates creation of this administrative remedy was intended to affect the rights of the Tribe and the United States if they choose instead to file a trespass action in federal court, as they did.
If read as the Utility suggests, Article 33 would authorize the taking of Reservation land by inverse condemnation in violation of federal law and the use of such land in a manner contrary to the provisions of the Federal Power Act.
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28 F.3d 1544
29 Fed.R.Serv.3d 733, 24 Envtl. L. Rep. 21,275
UNITED STATES of America, as trustee for the Kalispel Indian
Tribe and individual allottees, Plaintiff-Appellee,
and
Kalispel Indian Tribe, Intervening-Plaintiff,
v.
PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal
corp., Defendant,
and
Department of Natural Resources, State of Washington,
Defendant-Intervenor-Appellant.
UNITED STATES of America, as trustee for the Kalispel Indian
Tribe and individual allottees, Plaintiff-Appellee,
and
Kalispel Indian Tribe, Intervening-Plaintiff,
v.
PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal
corp., Defendant-Appellant,
and
Department of Natural Resources, State of Washington,
Defendant-Intervenor.
UNITED STATES of America, as trustee for the Kalispel Indian
Tribe and individual allottees, Plaintiff-Appellant,
and
Kalispel Indian Tribe, Intervening-Plaintiff,
v.
PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal
corp., Defendant-Appellee,
and
Department of Natural Resources, State of Washington,
Defendant-Intervenor.
UNITED STATES of America, as trustee for the Kalispel Indian
Tribe and individual allottees, Plaintiff,
and
Kalispel Indian Tribe, Intervening Plaintiff-Appellant,
v.
PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal
corp., Defendant-Appellee,
and
Department of Natural Resources, State of Washington,
Defendant-Intervenor-Appellee.
UNITED STATES of America, Plaintiff,
and
Kalispel Indian Tribe, Plaintiff-Intervenor-Appellant,
v.
PEND OREILLE PUBLIC UTILITY DISTRICT NO. 1, a municipal
corp., Defendant-Appellee,
and
Department of Natural Resources, State of Washington,
Defendant-Intervenor-Appellee.
Nos. 88-3617 through 88-3619, 88-3669, 92-35504.
United States Court of Appeals,
Ninth Circuit.
Argued and Submitted April 12, 1993.
Decided July 14, 1994.
Elizabeth Ann Peterson, U.S. Dept. of Justice, Washington, DC, for plaintiff-appellee-appellant.
Allen H. Sanders, Evergreen Legal Services, Seattle, WA, for plaintiff-intervenor-appellant.
Jerry K. Boyd, Spokane, WA, for defendant-appellant-appellee.
J. Lawrence Coniff, Asst. Atty. Gen., Olympia, WA, for defendant-intervenor-appellant-appellee.
Appeals from the United States District Court for the Eastern District of Washington.
Before: BROWNING, SCHROEDER, and FLETCHER, Circuit Judges.
JAMES R. BROWNING, Circuit Judge:
This is the second opinion of this court dealing with issues arising out of a judgment entered by the district court in an action brought by the United States on behalf of the Kalispel Indians against the Public Utility District No. 1 of Pend Oreille County, Washington. The Federal Power Commission issued a license to the Utility to build and operate the Box Canyon Dam on the Pend Oreille River, which forms the western boundary of the Kalispel Indian Reservation in northeastern Washington. The United States filed suit alleging the Utility had flooded Reservation land and seeking damages and injunctive relief. The Kalispel Indian Tribe and the State of Washington intervened. The Tribe joined the trespass claims advanced by the United States on its behalf. Both the Tribe and the State claimed title to the riverbed.
The district court divided the trial into three phases. In the first two phases, the court considered whether the Utility had flooded Reservation land and whether the Tribe or the State owned the bed of the river. In our first opinion, reported at 926 F.2d 1502, we sustained the district court's holdings that the Utility had trespassed upon the Reservation by raising the level of the river and that the State, rather than the Tribe, owned the bed of the river.
In the final phase of the trial, the district court considered the remedy for the Utility's trespass. On this appeal, the Utility repeats its contention that the district court erred in concluding the Utility had trespassed on Reservation land. The Utility also contends the court erred in dismissing its counterclaim in condemnation against the United States and the Tribe, refusing to grant declaratory relief regarding the calculation of future damages, and awarding prejudgment interest on the damage award. The Tribe and the United States argue the district court erred in failing to include the value of the land as part of the power project in determining the amount of damages, refusing to grant injunctive relief, and denying the Tribe leave to amend its complaint to allege a claim for water and fishing rights.
We adhere to our determination that the Utility trespassed on the Tribe's lands; we affirm the denial of the Utility's motion for declaratory relief and the Tribe's motion to amend its complaint; and we reverse the damage and prejudgment interest awards and the denial of injunctive relief.
I. LIABILITY FOR TRESPASS
The Utility argues there was no trespass because Article 33 of the project license authorizes the Utility to flood Reservation land and compensate the Tribe at the rate the Utility pays private land owners--the rental value of the land as grazing land. It is too late for the Utility to challenge the existence of a trespass. That question was resolved against its position by the district court, and we affirmed the district court's conclusion in our first opinion. During phase three of the trial, the district court found the Utility knew it had no right to flood Reservation land, but flooded it anyway, a finding supported by substantial evidence.
In any event, the Utility's interpretation of Article 33 is without merit. The language of Article 33 neither authorizes the Utility to flood Reservation land, nor specifies the amount of damages the Utility would owe the Kalispel Indians if it did. The first clause requires the Utility to operate the Dam in such "a manner as not to interfere with or damage Indian land of the [K]alispel Indian Reservation." The second clause provides an administrative procedure for compensating the Indians if the Utility breaches the prohibition against flooding Reservation land: "[I]n the case such damage should occur as a result of the operation of the project, the Indians shall be compensated in the manner and amount as determined by the Secretary, after consultation with the [K]alispel Indian Community Council and Licensee." Nothing indicates creation of this administrative remedy was intended to affect the rights of the Tribe and the United States if they choose instead to file a trespass action in federal court, as they did.
If read as the Utility suggests, Article 33 would authorize the taking of Reservation land by inverse condemnation in violation of federal law and the use of such land in a manner contrary to the provisions of the Federal Power Act. The Utility may not condemn tribal lands embraced in a reservation under the Power Act or any other federal statute, Escondido Mut. Water Co. v. La Jolla Band of Mission Indians, 466 U.S. 765, 786 n. 29, 104 S.Ct. 2105, 2117 n. 29, 80 L.Ed.2d 753 (1984); FPC v. Tuscarora Indian Nation, 362 U.S. 99, 113-14, 80 S.Ct. 543, 551-52, 4 L.Ed.2d 584 (1960), and may not take the land of individual Indian allottees through inverse condemnation, United States v. Clarke, 445 U.S. 253, 100 S.Ct. 1127, 63 L.Ed.2d 373 (1980). Section Sec. 4(e) of the Power Act prohibits the use of reservation lands for power production unless the Commission finds "that the license will not interfere or be inconsistent with the purpose for which such reservation was created or acquired" and the Secretary of the Interior imposes "such conditions as the Secretary ... shall deem necessary for the adequate protection and utilization of such reservation." 16 U.S.C. Sec. 797(e). Section 10(e)(1) of the Power Act prohibits the use of tribal lands embraced within a reservation unless the Commission fixes a "reasonable annual charge" for the use of the lands and the Indian tribe approves the charge. 16 U.S.C. Sec. 803(e)(1). None of these conditions were met. Neither the Commission nor the Secretary approved the flooding of the Reservation; the Commission did not find the Reservation could be flooded without interfering with the purpose for which the Reservation was created; the Secretary did not determine what conditions might be necessary for the protection and utilization of the Reservation; the Commission did not fix an annual charge for use of Reservation land, and the Tribe was not asked to approve such a charge.
These omissions apparently resulted from the failure of the Utility to disclose that Reservation land would be flooded by the project. The application and the license itself indicated the project would be so constructed and maintained that the Reservation would not be affected. The license stated the water level would be higher in normal flows "for possibly 24 miles upstream." The reservation is located 30 miles upstream. The license also incorporated a map locating the project boundary six miles downstream from the Reservation.
Based on the language of Article 33, the statutory scheme governing the use of Indian reservation lands, and the other evidence in the record, we conclude the project was to be operated in such a way as not to flood Reservation land, and that Article 33 was intended to reinforce that prohibition and provide a remedy for its violation, rather than to confer blanket authority upon the Utility to trespass on Reservation land.
II. DAMAGES
A. Primary Jurisdiction.
The Tribe contends the Secretary of the Interior has primary jurisdiction to determine questions relating to damage to Reservation land due to operation of the Dam by virtue of Article 33 of the license, and asks that these proceedings be stayed to allow the Secretary to exercise that jurisdiction. The doctrine of primary jurisdiction is inapplicable. The Secretary's authority to pass on damage issues arises from Article 33 of the project license, not from a grant of jurisdiction by Congress pursuant to a comprehensive regulatory scheme. United States v. General Dynamics Corp., 828 F.2d 1356, 1362-66 (9th Cir.1987). Congress authorized the Secretary to impose conditions in a project license "necessary for the adequate protection and utilization of [a] reservation," 16 U.S.C. Sec. 797(e), but Congress neither required the Secretary to include Article 33 in the license nor placed the damage issue "within the special competence of an administrative body" under "a regulatory scheme." United States v. Western Pac. R.R., 352 U.S. 59, 64, 77 S.Ct. 161, 165, 1 L.Ed.2d 126 (1956).
B. Standard for Determining Damages.
The district court concluded the Utility flooded approximately 186.7 acres of Reservation land for 30 years without an easement or court order, and awarded damages totalling $46,231. The court apparently concluded Washington law controlled and under that law the Tribe was entitled to recover only the rental value of the land for grazing.
The Tribe and the United States argue damages for trespass on Indian lands are controlled by federal law and the damage award was inadequate under federal law because it did not reflect the value of the land as a part of the Box Canyon Dam project. They reason that if inclusion of tribal lands within the Reservation had been anticipated, the Commission, in compliance with Sec. 10(e) of the Power Act, would have included in the project license a provision fixing an annual charge for use of the lands and the annual charge would have been calculated on the basis of the value of the use of the land as part of the project. Since operation of the project in fact affected such lands, and since the Utility circumvented the provisions of Sec. 4(e) and Sec. 10(e) and preempted the fixing of an annual charge by flooding the lands without first securing a license to do so, the Tribe and the United States reason the Utility must pay the Tribe what the Tribe lost--the annual charge that would have been imposed if Sec. 10(e) procedures had been implemented.
Whether the Commission would have determined the annual charge for use of tribal lands on this basis when the Utility's license was issued in 1952 is a matter of conjecture. Clearly Sec. 10(e) did not require the Commission to do so. The Commission's discretion in determining appropriate annual charges was limited only by the requirement that the charges be "reasonable." City of Vanceburg v. FERC, 571 F.2d 630, 647 (D.C.Cir.1977) ("[T]he Commission has a discretion within the statute in fixing 'reasonable annual charges', and thus conceivably might use any one of several methods in calculating the charge...."); Montana Power Co. v. FPC, 298 F.2d 335, 340 (D.C.Cir.1962) (holding that the only question is "whether the end result is a reasonable one as the statute requires it to be").
In 1952, the regulations implementing Sec. 10(e) specified the annual charge for use of government lands "will be based on the estimated value for power purposes." As to tribal lands, however, the regulations provided only that the Commission should determine the annual charge "on a case-by-case basis under Sec. 10(e) of the Federal Power Act." The Commission considered adopting a general rule for determining annual charges for a licensee's use of tribal lands, but declined to do so, preferring instead to set annual charges according to the facts of each case. Escondido Mut. Water Co., FERC Opinion No. 36-A, 6 F.E.R.C. (CCH) p 61,189 (1979), 1979 WL 19964, * 48, 1979 FERC LEXIS 1470, * 172.
The Tribe and the United States cite several cases for the proposition that under the regulations applicable in 1952, the annual charge fixed by the Commission for the use of tribal lands within the Reservation would have included the power site or shared benefits value of the land. In each of the cases cited, however, the license itself specified the charge fixed should be based "upon the commercial value of the tribal lands involved, for the most profitable purpose for which suitable, including power development." Montana Power Co. v. FPC, 459 F.2d 863, 869 (D.C.Cir.1972); Confederated Salish and Kootenai Tribes v. United States, 181 Ct.Cl. 739, 747, 1967 WL 8892 (1967); see also Escondido Mut. Water Co. v. FERC, 692 F.2d 1223, 1228 (9th Cir.1982), amended, 701 F.2d 826 (9th Cir.1983), rev'd in part, 466 U.S. 765, 104 S.Ct. 2105, 80 L.Ed.2d 753 (1984). Moreover, the language of the licenses at issue in Montana Power and Confederated Salish was taken directly from Commission regulation 14, section 5, which was superceded in 1938, before the license for the Box Canyon Dam project was issued.
Although use of the value of the tribal lands as part of the power project in calculating the annual charge is not compelled by regulation or case law, we nevertheless conclude it is the most acceptable measure of damages for the Utility's trespass. As noted, the power site formula was reflected in the governing regulation prior to 1938, and the United States has advised the court this is the formulation now applied by the Commission in fixing annual charges for use of tribal lands on all power projects. Its use will also assure the Tribe will not suffer an uncompensated loss from the Utility's past failure to comply with the Power Act and will encourage future compliance.
The damage calculation urged by the Utility would encourage others to use Indian reservation lands for power production without complying with the Power Act. Applicants for licenses would be motivated to deny or minimize the anticipated effect of their project on Indian reservation lands (as the Utility did in this case) to avoid the risk that the Secretary and Commission might deny them use of the lands under Sec. 4(e), or the Commission might require them to pay annual charges that included the power site value of the tribal lands under Sec. 10(e). The Secretary and Commission cannot fulfill their respective obligations under Sec. 4(e) and Sec. 10(e) when applicants for Power Act licenses deny or understate the effect their projects will have on Indian reservation lands, or do not seek approval to use Indian reservation lands after they discover their projects include such lands. Moreover, circumventing the Act would deprive the Indians of their right, granted under Sec. 4(e) and Sec. 10(e), to influence the terms upon which the licensee uses reservation land. Requiring the Utility to reimburse the Tribe for the most profitable use of its land will encourage future applicants for licenses to fully disclose the effect of their projects on Indian reservation lands and current licensees to seek approval to use such lands from the Secretary and Commission.
III. PROSPECTIVE RELIEF
A. Injunctive Relief.
The Tribe and the United States sought an injunction against future flooding of Reservation land. The district court denied relief on the ground the Indians would be fully compensated in a condemnation proceeding the Utility had filed to condemn a permanent flowage easement.
The district court's ruling rested on an erroneous legal premise. Congress has the exclusive right to extinguish Indian title to lands, United States ex rel. Hualpai Indians v. Santa Fe Pac. R.R., 314 U.S. 339, 347, 62 S.Ct. 248, 252, 86 L.Ed. 260 (1941), and has not authorized condemnation of land held in trust by the United States for the benefit of the Tribe. A licensee cannot condemn tribal lands under Sec. 21 of the Power Act, 16 U.S.C. Sec. 814, but must obtain Commission authorization to use such lands under Sec. 4(e) and Sec. 10(e) of the Power Act. Escondido, 466 U.S. at 786 n. 29, 104 S.Ct. at 2117 n. 29; Tuscarora, 362 U.S. at 113-14, 80 S.Ct. at 551-52.
The Utility may be able to condemn land held in trust by the United States for the benefit of individual Indian allottees under 25 U.S.C. Sec. 357, but this statute does not apply to land held in trust for the Tribe. Nebraska Public Power Dist. v. 100.95 Acres of Land, 719 F.2d 956, 961 (8th Cir.1983). Even if the Utility could condemn land held in trust for individual allottees, it could not occupy such land until it obtained judgment through a condemnation proceeding, Clarke, 445 U.S. 253, 100 S.Ct. 1127 (25 U.S.C. Sec. 357 does not authorize inverse condemnation), which it has not done. In addition, since a significant portion of the land along the river is held in trust for the Tribe and would be flooded if the Utility flooded the land held in trust for individual allottees, the Utility could not raise the level of the river without violating the rights of the Tribe.
On remand, the district court should consider whether to issue an injunction in light of the correct legal principles and the Utility's and State's assertion that a large part of the Pacific Northwest would suffer a power shortage if the Utility were enjoined from flooding the land in question. If the district court decides to enjoin the flooding, it could fashion a remedy to minimize the harm such an injunction might cause. The court could, for example, enjoin the Utility from occupying Reservation land but stay the order to permit the Utility to seek an amendment to its license and satisfy the Power Act, especially Sec. 4(e) and Sec. 10(e).
B. Declaratory Relief.
Since the Box Canyon Dam license does not authorize the Utility to flood Reservation land, the district court acted in its discretion in refusing to grant declaratory relief regarding the calculation of future damages.
IV. DENIAL OF TRIBE'S MOTION TO AMEND
Twenty four days before trial of the third phase was to begin, the Tribe sought leave to amend its complaint in intervention to allege a claim for water and fishing rights under Winters v. United States, 207 U.S. 564, 28 S.Ct. 207, 52 L.Ed. 340 (1908). The district court denied the motion as untimely. We reversed because the district court had relied solely upon the Tribe's delay in bringing the motion without considering whether the opposing parties had been prejudiced. United States v. Pend Oreille Public Utility Dist. No. 1, 926 F.2d 1502, 1511-12 (9th Cir.1991). On remand, the district court found the delay had been unduly long and that the Utility would be prejudiced if the motion were granted. Fed.R.Civ.P. 15(a); Moore v. Kayport Package Exp., Inc., 885 F.2d 531, 538 (9th Cir.1989) ("In deciding whether justice requires granting leave to amend, factors to be considered include the presence or absence of undue delay ... [and] undue prejudice to the opposing party....").
The Tribe's delay was extreme and unexplained. The legal basis for the claim had existed since 1908. The United States filed the action in March of 1980. The Tribe intervened in August of 1982. The Tribe moved to add the Winters claim seven years after the case began, five years after leave to intervene was granted, eleven months after the district court entered judgment against the Tribe in the second phase, approximately a month after the close of discovery in the third phase, and twenty-four days before the commencement of the third phase trial. The Tribe offered no explanation for the delay.
Prejudice to the Utility would have been substantial. The Tribe had alleged ownership of the beds and shores of the river but not of the water or fish. The extensive discovery undertaken prior to the second phase trial did not consider reserved water and fishing rights. Completed depositions would have to be retaken, new depositions of yet-to-be retained experts would have to be scheduled, and new state agencies would have to be brought into the action with new attorneys to represent the interests of those agencies. Trial of the third phase would have been substantially delayed.
The district court's findings regarding undue delay and prejudice are not clearly erroneous and amply justify denial of the motion to amend. See Western Shoshone Nat'l Council v. Molini, 951 F.2d 200, 204 (9th Cir.1991); Jackson v. Bank of Hawaii, 902 F.2d 1385, 1387 (9th Cir.1990); M/V American Queen v. San Diego Marine Const., 708 F.2d 1483, 1492 (9th Cir.1983).
V. DISMISSAL OF UTILITY'S COUNTERCLAIM
The district court allowed the Utility to amend its answer to include a counterclaim in condemnation. The counterclaim was served on the attorneys for the United States and the Tribe. The court dismissed the claim for failure to serve the individual Indian allottees of the land the Utility sought to condemn. The Utility contends dismissal was improper because the United States represented both the Tribe and the allottees. We agree. When a party is represented by an attorney, service on that attorney is proper service. Fed.R.Civ.P. 5(b). The United States has discretion to represent the individual Indian allottees under 25 U.S.C. Sec. 175. Siniscal v. United States, 208 F.2d 406, 410 (9th Cir.1953). The record establishes the United States and the Tribe represented all the Indian landowners in the case. On remand, the district court should consider whether the Utility can state a claim for condemnation.
VI. PREJUDGMENT INTEREST
The Utility argues the district court erred in awarding pre-judgement interest. The district court awarded prejudgment interest pursuant to state law, presumably because it calculated damages pursuant to state law. Since this case arises under federal law, the district court should apply federal pre-judgment interest principles. Home Savings Bank, F.S.B. v. Gillam, 952 F.2d 1152, 1161 (9th Cir.1991) ("The award of pre-judgement interest in a case arising under federal law rests within the sound discretion of the court."); Board of County Commissioners v. United States, 308 U.S. 343, 352, 60 S.Ct. 285, 289, 84 L.Ed. 313 (1939) ("The cases teach that interest is not recovered according to a rigid theory of compensation for money withheld, but is given in response to considerations of fairness. It is denied when its exaction would be inequitable."). On remand, the district court should determine under federal law whether prejudgment interest is appropriate and the appropriate amount.
VII. CONCLUSION
We reverse the district court's damage award and remand for recalculation according to the most profitable use of the flooded Reservation land. On remand, the district court may consider whether this is an appropriate case for prejudgment interest under federal law. We also reverse the district court's order denying an injunction and dismissing the Utility's counterclaim in condemnation. We affirm the denial of the Utility's motion for declaratory relief and the Tribe's motion to amend its complaint to add a Winters claim.