Federal reserved water rights are based upon a reservation of water by the United States government, typically stemming from case law, presidential executive order, or an act of Congress. For example, Indian reserved rights are generally based upon the 1908 United States Supreme Court decision in Winters v. United States of America, 207 U.S. 564 (1908), establishing the "Winters Doctrine." Finally, some non-Indian federally reserved rights are invoked by Congressional Act, such as the Wilderness Act or other federal reservation creation acts.

Federal reserved claims differ from state law based claims in that beneficial use of water and the perfecting of a water right are not required (in all cases). For example, federal rights are set aside, or reserved, for use on the reservations (non-Indian or Indian) regardless of whether the water is put to beneficial use. The only stipulations are that the water be utilized for the defined purpose of the reservation and that it claims a priority date based upon the creation of the reservation.

Federal water law is predominantly based on case law handed down over the years in numerous federal court decisions. Some of the leading cases decided by the United States Supreme Court are:

HENRY WINTERS, ET AL. v. UNITED STATES OF AMERICA, 207 U.S. 564 (1908)

The Court established in 1908 what is now known as the "Winters Doctrine." It found that an Indian reservation (in this case, the Fort Belknap Indian Reservation) may reserve water (of the Milk River in Montana) for future use in an amount necessary to fulfill their purpose with a priority dating from the treaty, act of congress, or executive order that established the reservation (May 1, 1888 in this case).

CAPPAERT v. UNITED STATES OF AMERICA, 426 U.S. 128 (1976)

This interesting case, decided by the Court in 1976, involved the issue of groundwater pumping and its impact on the surface water resources at a nearby federal national monument (Devil's Hole National Monument, Nevada). The junior groundwater pumpers (Cappaert) were restricted to ensure desert pup-fish (a threatened and endangered species) survival. The Court, however, ruled that the federal reserved right quantification was limited to the primary purpose of the reservation and only to the minimum amount of water necessary to fulfill the purpose of the reservation. Put simply, the National Park Service was allowed to retain exclusive rights to enough water (in the pool) in order to maintain the minimum amount necessary to ensure the survival of the fish. Any amount of water over and above this minimum was available for pumping by the Cappaerts.

UNITED STATES OF AMERICA v. NEW MEXICO, 438 U.S. 696 (1978)

In 1978, the Court found that the reserved water rights on national forests apply only to the preservation of timber resources and water flows. All other claimed needs were to be considered secondary purposes and the federal government would have to obtain rights like any other appropriator under state law. The Court also cautioned that quantification of these reserved rights should involve consideration of the potential impacts on downstream junior state law-based water rights appropriators.

ARIZONA v. CALIFORNIA, 373 U.S. 546 (1963), supp., 439 U.S. 419 (1979), supp., 460 U.S. 605 (1963)

This landmark decision, initially entered in 1963, with a subsequent decree issued in 1964, confirmed the division of waters of the Colorado River among the Lower Basin States (Arizona, California, and Nevada). The Court quantified the reserved rights of five Indian reservations (along the Colorado River) on the basis of the amount of water necessary to irrigate all practicably irrigable acres (PIA) on the reservations. This is known as the PIA method of quantifying reserved rights. The Supreme Court also placed stipulations and requirements on the State of New Mexico regarding uses of water from the Gila River (and tributaries) and confirmed that the contribution of the flow of the Gila River was excluded from Arizona's 2.8 million acre-feet annual Colorado River entitlement.

In addition to Indian reservations, Court decisions have extended the reserved right doctrine to encompass water uses in national forests, national parks and monuments, military reservations, and lands formally reserved and administered by the Bureau of Land Management.