Case
In The
No.
01-591 L
(Filed:
__________
KLAMATH
IRRIGATION DISTRICT, et al.,
Plaintiffs,
v.
THE
UNITED STATES,
Defendant,
PACIFIC
COAST FEDERATION OF
FISHERMEN’S
ASSOCIATIONS,
Defendant-Intervenor.
Motions
for partial summary judgment;
Takings
claims under Fifth Amendment;
Contract
claims; Interests in water of the
reclamation
law – Reclamation Act of
1902;
Section 8 - appurtenancy and
beneficial
use clause;
distribution
to be determined under state
law;
Ickes
line of cases;
State law –
Oregon
Act of 1905; Pre-1905 interests;
Post-1905
interests; Interests based on
contracts;
Third-party beneficiaries;
Standing
of districts to sue; Interests
based
on deeds and certificates.
__________
OPINION
__________
Nancie
Gail Marzulla and Roger J. Marzulla,
for
plaintiffs.
Kristine
Sears Tardiff, United States
Department of Justice,
whom
was Assistant Attorney General Thomas
L Sansonetti, for defendant.
Todd
Dale True, Earthjustice Legal
Defense Fund,
Wiygul,
Waltzer & Associates,
ALLEGRA,
Judge:
**************
1 An
amicus
curiae memorandum was filed
by John D. Echeverria, Georgetown Environmental Law & Policy Institute,
Case
What
is property? The derivation of the word is simple enough, arising from the Latin
proprietas or
“ownership,” in turn stemming from proprius, meaning “own” or “proper.” But, this
etymology reveals little. Philosophers such as Aristotle, Cicero, Seneca,
Grotius, Pufendorf and Locke each, in turn, have debated the meaning of this
term, as later did legal luminaries such as Blackstone,
Here,
the court must give practical meaning to the term “property” as used in a
specific legal context, a constitutional one, to
wit, the Fifth
Amendment’s mandate “nor shall private property be taken for public use,
without just compensation.” In the case sub
judice, a group
of water districts and individual farmers seek just compensation under the Fifth
Amendment, as well as damages for breach of contract, owing to temporary
reductions made in 2001 by the Department of Interior’s Bureau of Reclamation
(the Bureau) on the use, for irrigation purposes, of the water resources of the
Klamath Basin of southern Oregon and northern California. At issue in the
pending cross-motions for partial summary judgment is whether plaintiffs’
various interests in the use of
plaintiffs
to receive water from the
TABLE
OF CONTENTS
I.
Facts and Background ....................................................................................................3
A.
Plaintiffs
................................................................................................................3
B.
The Federal Reclamation Laws
..............................................................................3
C.
The Klamath Project
.............................................................................................5
D.
Water Rights in
E.
History of this Litigation
........................................................................................10
II.
Discussion .....................................................................................................................13
A.
Federal Reclamation Law
....................................................................................
14
B.
State Law
.............................................................................................................24
1.
Pre-1905 Potential Interests
.......................................................................29
2.
Post-1905 Potential Interests
.....................................................................30
3.
The Nature of the Interests Created in the Post-1905 Transactions
.............35
a.
Interests based on contracts
...........................................................35
b.
Interests based upon applications for water rights or post-1953
grants
of water rights by the State of
Case
III
Conclusion......................................................................................................................48
Appendix............................................................................................
...........................49
I.
FACTS AND BACKGROUND2
A.
Plaintiffs
Plaintiffs
– 13 agricultural landowners and 14 water, drainage or irrigation districts in
the
water
from irrigation works constructed or operated by the Bureau. They trace their
alleged
interests
in that water to a variety of sources, including federal reclamation law,
general state
water
law principles, water-delivery contracts between the irrigation districts and
the United
States,
deeds to real property purporting to convey a right to receive water, and a
federal-state
water
law compact. The landowning plaintiffs seek just compensation both as
beneficiaries of
the
district plaintiffs’ contracts with the
“Klamath
Project water rights” that exist independently of the district contracts. The
districts, in
turn,
seek breach of contract damages, as well as just compensation on behalf of their
members,
who
are the beneficiaries of the district contracts and the persons ultimately
harmed by the
Bureau’s
reduction in water deliveries in 2001.
A.
The
Federal Reclamation Laws
The
Reclamation Act of 1902, ch. 1093, 32 Stat. 388 (codified, as amended, at 43
U.S.C.
§§
371 et seq.)
(the Reclamation Act), directed the Secretary of the Interior (the Secretary) to
reclaim
arid lands in certain states through irrigation projects and then open those
lands to entry
by
homesteaders. As recently recounted by the Supreme Court, this enactment “set
in motion a
massive
program to provide federal financing, construction, and operation of water
storage and
distribution
projects to reclaim arid lands in many Western States.” Orff
v.
S.Ct.
2606, 2608 (2005); see
also
v.
would
“withdraw from public entry arid lands in specified western States, reclaim
the lands
through
irrigation projects,” and then “restore the lands to entry pursuant to the
homestead laws
and
certain conditions imposed by the Act itself.”
Congress
specifically directed, in section 8 of the Reclamation Act, that the
act
in accordance with state law to acquire title to the water used. 32 Stat. 390
(codified, in part,
at
43 U.S.C. § 383); see
responsibility
for constructing reclamation projects and for administering the distribution of
**********
2 These
facts shall be deemed established for purposes of future proceedings in this
case.
RCFC
56(d).
Case
water
to agricultural users in a project service area. See
Reclamation Act, §§ 2-10,
32 Stat.
388-90.
In
1911, Congress enacted the Warren Act, ch. 141, 36 Stat. 925 (codified at 43
U.S.C. §§
523-25),
section 2 of which authorized the Secretary “to cooperate with irrigation
districts, water
users’
associations, corporations, entrymen or water users . . . for impounding,
delivering, and
carrying
water for irrigation purposes.” 43 U.S.C. § 524. Under a 1912 amendment of
the
Reclamation
Act, individual water users served by a reclamation project could acquire a
“water-right
certificate” by proving that they had cultivated and reclaimed the land to
which the
certificate
applied. Act of
U.S.C.
§ 541). Congress required that the individual's land patent and water right
certificate
would
“expressly reserve to the
§
542).
In
1922, Congress enacted legislation expanding the
contract
not only with individual water users, but also with “any legally organized
irrigation
district.”
Act of
event
of such a district contract, the
individual
landowners, provided that the landowners agreed to be subject to “assessment
and
levy
for the collection of all moneys due and to become due to the
districts
formed pursuant to State law and with which the
contract
therefor.” § 2, 42 Stat. 542 (codified at 43 U.S.C. § 512). The Fact-Finders
Act of 3
1924,
43 Stat. 702 (codified at 43 U.S.C. §§ 500-01), required that once two-thirds
of a division
of
a reclamation project was covered by individual water-rights contracts, that
division was
required
to organize itself into an irrigation district or similar entity in order to
qualify for certain
financial
incentives. The newly-formed district would, thereafter, assume the “care,
operation,
and
maintenance” of the project, and the
instead
of the individual water users.
**********
3 The
legislative history of the 1922 act reflects that Congress viewed these changes
as
significant.
See H.R.
Rep. No. 662, at 2 (1922) (“the Federal Government is dealing with the
irrigation
district instead of the individual owner or water users' association”); 62
Cong. Rec.
3573
(1922) (statement of Rep. Kinkaid) (“This language authorizes the taking of
the district
collectively,
taking the lands of the district collectively, for the payment of the cost of
the
construction
of the irrigation works, in lieu of holding each farm unit singly for its
proportionate
share
of the cost of the construction.”); id.
at 3575 (statement of Rep. Mondell) (“The
Reclamation
Service has for years encouraged the organization of irrigation districts . . .
whereby
the
water users as a body, as a whole, become responsible for all of the
charges.”); id.
at 5859
(statement
of Sen. McNary) (“the Government is dealing with organized irrigation
districts rather
than
the various individual entrymen who take water in the projects”).
Case
In
1926, Congress enacted additional measures providing that, thenceforth, the
United
States
could enter into contracts for reclamation water only with “an irrigation
district or
irrigation
districts organized under State law.” Act of
(codified
as amended at 43 U.S.C. § 423e). Thereafter, the
with
irrigation districts. The exclusivity of these arrangements was reemphasized in
the
Reclamation
Act of 1939, ch. 418, 53 Stat. 1187, section 9(d) of which provided that “[n]o
water
may
be delivered for irrigation of lands . . . until an organization, satisfactory
in form and powers
to
the Secretary, has entered into a repayment contract with the
(codified
at 43 U.S.C. § 485h(d)).
Various
provisions in these reclamation laws expressed Congress’ desire to create a
financing
mechanism that would allow the government to recoup the costs of constructing
and
operating
the reclamation projects by requiring the irrigation districts to reimburse the
United
States
for water delivery costs through long-term water service contracts. See
43 U.S.C. §§ 391,
419,
423e, 423f, 461, 485a, 485b-1, 492-93. However, there are indications that this
financing
mechanism
has not worked as originally anticipated, leaving significant reclamation costs
unamortized.
Studies conducted by the General Accounting Office (GAO) have documented this
failure
and attributed it to several causes: (i) while spreading project repayment
obligations over
several
decades, Congress did not require the payment of interest on the costs of the
project, see
42
U.S.C. § 485a; (ii) Congress generally has limited the repayment obligation to
only those
costs
that are considered within the irrigation district's ability to pay, see 43
U.S.C. § 485b-1(b);
and
(iii) Congress has enacted charge-offs that selectively eliminate portions of
the repayment
obligations
in the case of certain projects. See
GAO, Rep. No. 96-109, Bureau
of Reclamations:
Information
on Allocation and Repayment of Costs of Constructing Water Projects 15-22
(1996);
GAO,
Rep. No. 81-07, Federal Charges for Irrigation Projects Reviewed Do Not Cover
Costs 9-
12
(1981). The parties disagree as to the existence (and, if so, extent) of such a
shortfall as to the
Klamath
Reclamation Project (the Klamath Project).
B.
The
Klamath Project
The
water
reclamation and irrigation projects since the late nineteenth century. The
Klamath Project,
originally
authorized in 1905, was one of the first to be constructed under the Reclamation
Act.
See
Bennett v. Spear, 520
342
F.2d 447, 448 (Ct. Cl. 1965). The federal legislation authorizing the project
provided, inter
alia,
that “the Secretary of the Interior is hereby authorized in carrying out any
irrigation project
.
. . to raise or lower the level of” the lakes and rivers of the
necessary
and to dispose of any lands which may come into the possession of the
a
result thereof.” Act of
The
Klamath Project provides water to about 240,000 acres of irrigable land, as well
as
several
national wildlife refuges. It is operated by the Bureau to “serve[] and
affect[] a number
of
interests,” including the supply of irrigation water to agricultural interests
in the Klamath
Case
River
Basin and the supply of water to the
Refuges
“for permanent and seasonal marshlands and irrigated crop lands.”
Federation
of Fishermen’s Associations v. Bureau of Reclamation,
138 F. Supp.2d 1228, 1230
(N.D.
1192,
1196 (D. Or. 2001). The Link River Dam regulates water flows from
into
the lower portions of the
storage
reservoir, and because
capture
and store large quantities of water from spring run-off,” the Bureau is unable
to store up
enough
water during wet years for use in subsequent dry years – a fact that
apparently makes the
Klamath
Project more vulnerable to droughts.
In
operating the Klamath Project, the Bureau prepares periodic streamflow forecasts
and
annual
operating plans “in order to provide operating criteria and to assist water
users and
resource
managers in planning for the water year.” Kandra,
145 F. Supp.2d at 1197. In the late
1990s,
the Bureau announced its intent to establish a new, long-term operating plan for
the
project.
As of mid-2001, that plan was still not in place, and the Bureau instead was
operating
the
Project using one-year interim plans.
Those
plans required it to “manage water resources carefully in order to meet . . .
competing
purposes
and obligations,” a balance that was particularly difficult to strike because
of the limited
storage
capacity caused by the shallowness of the lake. PCFFA,
138 F. Supp.2d at 1231.
In
its operations, the Bureau must take into account its obligation, under the
Endangered
Species
Act (ESA), to ensure that project operations are not “likely to jeopardize the
continued
existence
of any endangered species.” 16 U.S.C. § 1536(a)(2). In regards to this
statute, the
Supreme
Court has stated: “[t]he plain intent of Congress in enacting this statute was
to halt and
reverse
the trend toward species extinction, whatever the cost.”
Hill,
437
assessment
“for the purpose of identifying any endangered species which is likely to
affected” by
the
operations of the Klamath Project. 16 U.S.C. §1536(c)(1). The Bureau has
delegated its
authority
to conduct such assessments for two species – the coho salmon and suckerfish
– to the
National
Marine Fisheries Service (NMFS) and the Fish and Wildlife Service (FWS),
respectively.
See 50
C.F.R. §§ 17.11, 402.01(b). Under the ESA, if the Bureau determines that 4
an
endangered or threatened species may be affected by its proposed action, it must
send the
NMFS
or the FWS a request for a “formal consultation,” in response to which the
appropriate
agency
will produce its biological opinion. See
16 U.S.C. § 1536(a)(2), (b);
50 C.F.R. § 402.14.
“If
the Biological Opinion concludes that the proposed action is likely to
jeopardize a protected
species,
the agency must modify its proposal” to alter that result. See
Natural Resources Defense
Council
v. Houston, 146 F.3d 1118,
1125 (9 Cir. 1999), cert.
denied, 526
**********
4 NMFS
is now part of the National Oceanographic and Atmospheric Administration
(NOAA)
and known as “NOAA Fisheries.” For the sake of clarity and convenience, the
court
will
continue to use this agency’s old title in this opinion.
Case
Failure
to observe this procedure has led to litigation and injunctive relief against
the Bureau for
violating
the ESA. See,
e.g., PCFFA, 138 F. Supp.2d
at 1248.
C.
Water
Rights in
Shortly
after passage of the 1905 federal authorization for the Klamath Project, the
State
of
Engineer
“a written notice that the
unappropriated
at the time of the filing.” Or. Gen. Laws, 1905,
of
such a notice would result in those waters being “deemed to have been
appropriated by the
[a]ll
of the waters of the
receiving
water therefrom” for purposes of the “operation of works for the utilization
of water . .
.
under the provisions of the . . . Reclamation Act.” Agents of the
notices
of its appropriation on sites along the Klamath and
In
1905, the
aiding
in the operations of irrigation and reclamation . . . the
to
lower the water level of” various
This
law ceded to the
uncovered
by the lowering of the water levels.”
ceded
by the
this
action. The Bureau required these and other homesteaders who wished to receive
deliveries
of
Project water to file with the Bureau one of two “water rights
applications.” The first type, a
“Form
A” water rights application, was used by homesteaders on reclaimed land and,
by its
terms,
generally sought sufficient water as “may be applied beneficially in
accordance with good
usage
in the irrigation of the land.” This form included a “water shortage”
clause that allowed
the
applicant an “equitable proportionate share . . . of the water actually
available.” The second
type
of application, a “Form B” water rights application, was used by existing
landowners in the
Basin
who were not on reclaimed lands. This form typically provided that “the
measure of the
water
right” applied for was “that quantity of water which shall be beneficially
used for the
irrigation”
of the applicant’s land, “but in no case exceeding the share proportionate
to irrigable
acreage,
of the water supply actually available as determined by the Project Manager or
other
proper
officer of the
By
1911, when the Warren Act was passed, apart from the United States, water rights
in
the
Klamath Project were mostly held by individual landowners – although as early
as 1905, the
Bureau
entered into a “repayment contract” with an incorporated entity, the Klamath
Water Users
Association,
which was made up of owners and occupiers of lands within the Project, some of
whom
were already appropriators of water for irrigation. According to this contract,
the
Case
association
“guarantee[d] the payments [to the
irrigation
works apportioned by the Secretary of the Interior to each shareholder” and
also
undertook
to collect shareholders’ payments on the government’s behalf. It appears
that at least
ten
of the plaintiff irrigation, drainage or water districts in this action
initially entered into
contracts
with the Bureau under the auspices of the Warren Act. 5
As
noted above, the decades that followed saw the reclamation laws shift away from
having
the Bureau enter into individual water-rights contracts and toward
district-level water
delivery
contracts. As part of this trend, 13 of the 14 districts involved in this action
eventually
obtained
contracts with the Bureau for the delivery of Klamath Project water. The
fourteenth 6
district,
Klamath Hills District Improvement Company, has no such contract. Of the 13
districts
that
have water delivery contracts with the Bureau, eight include provisions holding
the United
States
harmless for “any damage, direct or indirect,” resulting “[o]n account of
drought or other
causes”
of “a shortage in the quantity of water available” from Project sources.
Some of those 7
provisions
also require the
shortage[s].”
Four other districts’ contracts include a similar provision stating that
“[t]he United
States
shall not be liable for failure to supply water under this contract caused by .
. . unusual
drought.”
The contract for plaintiff Van Brimmer Ditch Company includes no such shortage 8
provision.
Certain
individual water users’ application contracts with the Bureau plainly have
been
superseded
by the district-level contracts, under which the districts assumed both the
individual
water
users’ repayment obligations and the Bureau’s water delivery obligations.
The Bureau’s
*********************
5 Those
10 are Klamath Drainage District, Sunnyside Irrigation District,
Improvement
District, Malin Irrigation District, Westside Improvement District No. 4, Shasta
View
Irrigation District, Poe Valley Improvement District, Midland District
Improvement Co.,
Enterprise
Irrigation District, and Pine Grove Irrigation District.
6 Those
13 are Klamath Irrigation District, Klamath Drainage District, Tulelake
Irrigation
District,
Sunnyside Irrigation District, Klamath Basin Improvement District, Malin
Irrigation
District,
Westside Improvement District No. 4, Shasta View Irrigation District,
Improvement
District, Midland District Improvement Co., Enterprise Irrigation District, Pine
Grove
Irrigation District, and Van Brimmer Ditch Company.
7 Those
8 with the same or substantially similar provisions are Klamath Irrigation
District,
Tulelake Irrigation District, Klamath Drainage District, Sunnyside Irrigation
District,
Klamath
Basin Improvement District, Malin Irrigation District, Westside Improvement
District
No.
4, and Shasta View Irrigation District.
8 Those
four are Enterprise Irrigation District, Poe Valley Improvement District,
District
Improvement Co., and Pine Grove Irrigation District. The
contracts
omit the word “unusual” before “drought.”
Case
pursuant
to Public Notice No. 13 of
States
of the written consent of the person or persons in whose ownership said
individual water
right
application is vested.” Likewise, the
Poe
Valley Improvement District provides that “[t]he
recognize
that certain lands included within the District are subject to contracts with
the United
States
for water supply, and that it is the intent of the parties to such contracts to
terminate the
same,”
subject to enumerated conditions. And the
Klamath
Irrigation District provides that “[t]he District hereby assumes and agrees to
carry out
.
. . all the obligations imposed upon the
for
the carriage and delivery of water,” and that “the District shall be
entitled to collect and retain
for
its own use . . . all revenues payable to the
contracts.”
This contract also states, however, that “[a]ll other provisions of said
contracts shall
remain
unaffected hereby.” Other district contracts, however, make no mention of the
individual
water
users’ contracts and do not explicitly provide for the cancellation of the
individual water
rights
applications of the district members; several do state that the water rights
accruing to the
district
under the contract are “inferior and subject to prior rights reserved for the
lands of the
Klamath
Project.”
Several
plaintiffs claim other sources of property rights in Klamath Project water.
Thus,
certain
plaintiffs who acquired their land as homesteaders were, after complying with a
regulatory
scheme, granted title to their land in “patent deeds.” To obtain a patent
deed,
homesteaders
were required to file with the Bureau two documents: an Application for
Permanent
Water Right – Form A, and an affidavit “attesting to the fact that [the
homesteader]
had
put [the] Klamath Project water to beneficial use.” Once an applicant met the
requirements,
he
was issued the patent deed conveying the land “together with the right to the
use of water from
the
Klamath Reclamation Project as an appurtenance to the irrigable lands . . .
subject to any
vested
and accrued water rights for mining, agricultural, manufacturing, or other
purposes.” The
parties
disagree as to the scope of the interest in irrigation water conveyed by the
patent deeds.
Two
of the plaintiffs, the Klamath Drainage District and the Klamath Hills District
Improvement
Company, hold water right permits that they claim evidence their ownership of a
“vested
and determined water right” under
in
terms of a specific cubic feet per second of water, as well as to the amount of
water that could
be
applied to beneficial use, were issued after the State of
In
addition, it should not be overlooked that a number of
and
Yurok, hold fishing and water treaty rights in the Klamath Project waters. In
some instances,
these
rights derive from treaties, see
Treaty of 1864, 16 Stat. 708;
Or. Dept. of Fish & Wildlife v.
Klamath
Indian Tribe, 473
by
statute and executive order, see
Hoopa-Yurok Settlement Act of
1988, Pub. L. No. 100-580,
102
Stat. 2924 (confirming the existence of these water rights).
Case
Thus,
the Water Rights Act of 1909 authorizes the adjudication of federal reserved and
state law
water
rights initiated prior to the passage of the Act. See
Or. Rev. Stat. §§
539.005-240 (2003).
All
water rights “that had vested prior to 1909, but had never been subject to a
judicial
determination”
were “left intact as ‘undetermined vested rights.’”
F.3d
758, 764 (9 Cir. 1994) (quoting Or. Rev. Stat. § 536.007(11)). Any person
holding an th
“undetermined
vested right” or federal reserved right is required to file a “registration
statement”
with
the Oregon Water Resources Department that must state, among other things, the
stream
from
which the claimed water was diverted, the claimed beneficial use to which it was
put, and
the
time the claimed used first began. See
Or. Rev. Stat. § 539.240(2).
All such claims are then
entered
into the state’s records, and are made subject to a final determination of
rights in a
statutory
adjudication process. See
Or. Rev. Stat. §§
539.240(8), 539.10-240; see
also United
States
v.
An
adjudication process for the
1976
and remains pending. The Bureau, plaintiffs, and a variety of other
organizations and
individuals
have filed competing claims in that proceeding. No final decisions regarding
those
claims
have been rendered.
E.
History of this Litigation
For
decades,
as
they needed. In severe drought years, they simply received somewhat less. That
changed in
the
spring of 2001, when several federal agencies produced studies indicating that
water levels in
the
basin were so low as to threaten the health and survival of certain endangered
species. Water
forecasts
for 2001 predicted that year would be “critical[ly] dry,” with an inflow
volume into
of
inflow on record.” Kandra,
145 F. Supp. 2d at 1198. In January, 2001, the Bureau forwarded
a
biological assessment of the Project’s operations on the coho salmon and
requested the
initiation
of formal consultation with the NMFS under section 7 of the ESA.
assessment
regarding the endangered shortnose and
“live
in
2d
at 1230 – was forwarded to the FWS in March 2001. Kandra,
145 F. Supp. 2d at 1198. Both
assessments
concluded that operation of the Project was likely to affect adversely the three
species
in violation of the ESA, 16 U.S.C. § 1531, et seq.
The
two agencies then performed their own analyses and delivered draft Biological
Opinions
in March, 2001. Both draft opinions concluded that the Project’s operations in
2001
would
jeopardize the endangered species in question. Upon review of those opinions and
the
“reasonably
prudent alternatives” for the benefit of the fish proposed in them, the Bureau
advised
the
agencies that “the forecasted water supplies for 2001 were not adequate to
meet the needs” of
the
proposed alternatives, which involved maintaining water levels and river flows
sufficient to
increase
water quality for the endangered fishes’ habitat. On
Case
On
issued
a final biological opinion concluding that the proposed 2001 Operation Plan for
Upper
the
continued existence of the shortnose and
“likely
to be the driest year on record,” resulting in “extremely limited water
resources” in the
Basin,
the opinion concluded that the proposed operation plan for 2001 would likely
result in
“loss
of larval and juvenile sucker habitat at critical phases of their life cycle,”
significantly
increased
“loss of life” among suckerfish, and potentially lethal water quality
conditions. The
next
day, on
proposed
Operation Plan threatened the coho salmon. The opinion concluded that the
proposed
plan
would “result in the continued decline in habitat conditions” such that
“the survival and
abundance
of . . . coho salmon would be expected to decrease.” See
NMFS Biological Opinion
for
Klamath Project Operations 3 (
issued
As
required by the ESA, the biological opinions of both agencies included
“reasonable
and
prudent alternatives” to address the threat to the three fish species,
including reducing the 9
amount
of water available during 2001 for irrigation from
2001,
the Bureau issued a revised Operation Plan that incorporated the “reasonably
prudent
alternatives”
proposed by the agencies. That plan terminated the delivery of irrigation water
to
plaintiffs
for the year 2001. Three days later, on
Klamath
Irrigation District and the Tulelake Irrigation District, filed a
breach-of-contract action
in
the U.S. District Court for the District of Oregon to challenge the validity of
the biological
opinions
and to enjoin the Bureau from implementing the revised Operation Plan. That
court
denied
a preliminary injunction motion, and the two districts voluntarily dismissed
their suit in
early
October 2001.
On
two
claims: one for just compensation for their water rights, which they aver were
taken by
defendant’s
termination of delivery of irrigation water in 2001; and another for just
compensation
for
the impairment of their water rights, which they allege were recognized and
vested by the
interstate
agreement known as the Klamath Basin Compact.
************
9 The
ESA directs the Secretary of the Interior or the Secretary of Commerce to
suggest
“reasonable
and prudent alternatives” when consulted about Federal activities that might
adversely
affect
endangered species. See
Tulare Lake Basin Storage Dist. v.
315
n.2 (2001) (citing 16 U.S.C. § 1536(b)(3)(A)).
10 Plaintiffs
concede that defendant released 70,000 acre-feet of Klamath Project water to
users
in July 2001, but assert that this delivery came too late in the growing season
to allow them
to
grow crops.
Case
In
May 2002, defendant filed a motion to stay this action, arguing that the rights
claimed
by
plaintiffs are “a matter of state law,” and that because the “questions at
issue in the
Adjudication
also are required elements of Plaintiffs’ takings claims,” this court should
stay this
action
pending resolution of the Adjudication. On
complaint,
in which, in addition to their prior takings claims, they added a breach of
contract
count.
In September 2003, plaintiffs filed a motion for partial summary judgment
seeking a
determination
that their interests in Klamath Project water were not property interests at
issue in
the
Adjudication. On
the
issue of the nature and scope of plaintiffs’ property interest in Klamath
Project water and the
question
whether that interest was a compensable property interest for purposes of the
Takings
Clause
of the Fifth Amendment. On
to
stay and granted plaintiff’s motion for partial summary judgment, concluding
that plaintiffs’
claim
“assert[ed] no property interest determinable in the Adjudication,” because
plaintiffs claim
not
title to, “but only ‘vested beneficial interests’ in, the Klamath Basin
Project water.” This
action
was then permitted to proceed with the understanding that “plaintiffs are
barred from
making
any claims or seeking any relief in this case based on rights, titles, or
interests that are or
may
be subject to determination in the Adjudication.” 11
On
of
the nature and scope of their property interest and whether the
just
compensation for the taking of that interest. On
defendant’s
motion to hold in abeyance the portions of plaintiffs’ brief addressing the
issue of
ultimate
liability. This case was transferred to the undersigned on
reduced
their damages claim. On
filed
by the Pacific Coast Federation of Fishermen’s Associations. See
Klamath Irrigation Dist.
v.
supplemental
briefs on the property right issue. Two weeks later, on
held
oral argument on the parties’ cross-motions for summary judgment on the
property rights
issue.12
************
11 It
bears noting at this juncture that there is no per se rule
requiring this court to abstain
in
favor of a state water rights adjudication. Indeed, as a general rule,
“federal courts have a
virtually
unflagging obligation . . . to exercise the jurisdiction given them.” Moses H.
Cone
Mem'l
Hosp. v. Mercury Const. Corp.,
460
800,
817 (1976)); see also New
Orleans Public Serv., Inc. v. Council of
350,
358 (1989) (“The [federal] courts . . . are bound to proceed to judgment . . .
in every case to
which
their jurisdiction extends.”).
12 On
part,
and denying, in part, the motion to intervene. On
motion
to reconsider and, by separate order, invited defendant and defendant-intervenor
to file
short
briefs replying to portions of plaintiff’s reconsideration motion that
appeared to be directed
at
the property-rights issue. On
supplemental
briefs in response to the court’s order of
were
filed by the parties on
Case
.
II.
DISCUSSION
Summary
judgment is appropriate when there is no genuine dispute as to any material fact
and
the moving party is entitled to judgment as a matter of law. RCFC 56; Anderson
v.
Lobby,
Inc., 477
The
Takings Clause of the Fifth Amendment provides: “[N]or shall private property
be
taken
for public use, without just compensation.” U.S. Const. amend. V. In order to
prevail on
their
claim under this amendment, the plaintiff-irrigators must each establish that
they had a
property
interest in the waters of the
Whether
their respective interests in the waters of the
property”
protected by the Fifth Amendment is ultimately a question of federal
constitutional
law.
Powelson,
319
creates
property interests,” Phillips
v. Wash. Legal Foundation,
524
“property,”
for purposes of the Takings Clause, is defined by law independent of the Fifth
Amendment.
Thus, it has been said that “[t]he Constitution neither creates nor defines
the scope
of
property interests compensable under the Fifth Amendment,” which interests
instead are
defined
by “‘existing rules or understandings’ and ‘background principles’
derived from an
independent
source, such as state, federal, or common law.” Maritrans
Inc. v.
F.3d
1344, 1352 (Fed. Cir. 2003) (quoting Lucas
v. South Carolina Coastal Council,
505
1003,
1030 (1992)). Under these principles, it is axiomatic that “not all economic
interests are 14
‘property
rights’; only those economic advantages are ‘rights’ which have the law
back of them.”
United
States v. Willow River Power Co.,
324
“The
Landscape of Constitutional Property,” 86 Va. L. Rev. 885, 970-81 (2000). 15
************
13 See
Karuk Tribe v. Ammon, 209
F.3d 1366, 1374 (Fed. Cir. 2000) (stating that under a
takings
analysis, “[f]irst, a court determines whether the plaintiff possesses a valid
interest in the
property
affected by the governmental action”); Skip Kirchdorfer, Inc. v. United States,
6 F.3d
1573,
1580 (Fed. Cir.1993), cert.
denied, 516 U.S. 870 (1995)
(citing
14 See
also Palazzola v.
State
Colls. v. Roth, 408
(2005).
15 Federal
constitution law, of course, still impacts the definition of private property
interests
for purposes of the Takings Clause. In Lucas,
supra,
for example, the Supreme Court
said
that state-law definitions of private property rights must be based on an
“objectively
reasonable
application of relevant precedents.” 505
the
integrity of the Takings Clause is to be preserved as against entirely novel and
unprincipled
definitions
of property designed artificially to defeat or buttress a takings claim. See Webb’s
Fabulous
Pharmacies, Inc. v. Beckwith,
449
Case
In
applying these principles to water, it is important to understand that the issue
here is
not
who owns the water. Generally speaking, water “belongs to the public” and is
held in trust
by
the states involved. See,
e.g., California Oregon Power Co. v. Beaver Portland Cement Co.,
295
two
States at issue,
state
from all sources of water supply belongs to the public”); Milton
v. Coast Property Corp.,
151
Or. 208, 213 (Or. 1935) (noting that
Rather,
at least in the first instance, this case involves so-called “usufructuary”
rights – a right to
use
the water, ordinarily for a particular purpose and with specified limitations
and priorities.
Rencken
v. Young, 300 Or. 352, 363
(Or. 1985); Rank
v. Krug, 90 F. Supp. 773, 787
(C.D. Cal.
1950)
(“Such water rights are ‘usufructuary, and consist not so much of the fluid
itself as the
advantage
of its uses,’ and have been so regarded since the earliest day.”) (quoting
Eddy v.
Simpson,
3
Based
on these principles, the issues whether and, if so, to what extent, the
plaintiffirrigators
possess
property rights in the waters of the
three
possible sources for such rights: Federal law, apart from the Constitution;
the
extent relevant,
acquired
rights from a third party. The court will consider these potential sources, and
the
parties’
conflicting arguments with respect thereto, seriatim.
A.
Federal
Reclamation Law
Plaintiffs’
banner assertion is that their property interests in the Klamath water spring
from
the Reclamation Act of 1902, 32 Stat. 388 (1902) (codified, as amended, at 43
U.S.C. §§
371
et seq.).
Their view is bottomed on section 8 of that Act, which provides, in pertinent
part:
************
16
As explained in Rencken,
300
“[W]aters
of a natural stream or other natural body of water are not susceptible of
absolute
ownership as specific tangible property. Prior to the segregation of water
from
the general source, the proprietary right is usufructuary in character.” 1
(ed.),
Water and Water Rights 349 (1967) (footnotes omitted). “According to the
modern
accepted doctrine, it is the use of water, and not the water itself, in which
one
acquires property in general.” Sherred
v. City of
826
(1912).
See
also Washoe County v. United States,
319 F.3d 1320, 1322 (Fed. Cir. 2003).
[N]othing
in this Act shall be construed as affecting or intended to affect or to in
any
way interfere with the laws of any State or Territory relating to the control,
appropriation,
use, or distribution of water used in irrigation, or any vested right
acquired
thereunder, and the Secretary of the Interior, in carrying out the
provisions
of this Act, shall proceed in conformity with such laws, and nothing
herein
shall in any way affect any right of any State or of the Federal Government
or
of any landowner, appropriator, or use of water in, to, or from any interstate
stream
or the water thereof: Provided, That
the right to use of water acquired
under
the provisions of this Act shall be appurtenant to the land irrigated, and
beneficial
use shall be the basis, the measure, and the limit of the right.
Case
32
Stat. 388, 390 (1902) (codified at 43 U.S.C. §§ 372, 383 (2000)) (emphasis
added). Focusing
on
the highlighted language, the irrigators asseverate that because they own the
irrigated land that
is
appurtenant to the water in question, the statute confers upon them a property
interest in that
water.
Thus, they contend, their interests in the water derive directly from Federal
law, rather
than
the law of
rootless.
To
begin with, there is the statutory language. On its face, section 8 requires the
17
Secretary,
in carrying out his responsibilities under the Reclamation Act, to “proceed in
conformity
with” state laws relating to the “control, appropriation, use, or
distribution of water.”
It
is beyond peradventure that, rather than authorizing the Secretary to acquire
his water rights
independent
of state law, this section treats the Secretary as an appropriator under the
states’
appropriation
laws, requiring him to obtain his water rights in the same manner as others.
Nothing
in this language suggests that third parties, including irrigators, could obtain
title to
appropriative
water rights at Bureau projects other than through state law. Indeed, while the
Reclamation
Act indicates that the right to the use of certain water “shall be appurtenant
to the
land
irrigated,” this language refers only to water “acquired under the
provisions of this Act,”
which
“provisions” require the claimant to obtain those rights in accordance with
state law.
Accordingly,
the Reclamation Act does not, as plaintiffs intimate, independently define who
owns
interests in the water of Bureau projects, including the
that
question is controlled by state law, in this case, that of
This
reading of the statute is confirmed by extensive legislative history. As private
and
state
efforts at irrigating the arid lands of the West failed, pressure mounted during
the last
decade
of the 19 century for some form of federal support for irrigation. Many bills
were
************
17
“Statutory construction must begin with the language employed by
Congress and the
assumption
that the ordinary meaning of that language accurately expresses the legislative
purpose.”
Park 'N Fly,
Inc. v. Dollar Park & Fly, Inc.,
469
BedRoc
Ltd., LLC v.
has
instructed that “[t]he plainness or ambiguity of statutory language is
determined by reference
to
the language itself, the specific context in which that language is used, and
the broader context
of
the statute as a whole.” Robinson
v. Shell Oil Co., 519
Case
introduced
in Congress during this decade and up until 1902. As reflected in these bills, a
18
primary
point of contention was whether the irrigation projects should be built and
operated by
the
Federal government or instead be built by the Western States using land ceded to
them for
this
purpose. Ultimately, those who supported the Reclamation Act’s passage,
particularly
representatives
from the Western States that stood to benefit most from the Act’s passage,
convinced
a majority that reclamation was a national function and that the projects should
be
built
by the federal government. A robust secondary debate involved whether the
Federal 19
government
or the States should control the appropriation and distribution of project
water.
Opponents
of what would become the Reclamation Act espoused the view that, if the Federal
government
was to build and operate the projects, it should control the appropriation and
distribution
of the water. Supporters, however, retorted that this control should reside in
the
Western
States, each of which, by this time, had regimes for dealing with water rights.
They
noted
that the creation of a Federal regime for establishing water rights would
inevitably compete
with
the preexisting state regimes, threatening a life-blood issue for the arid
states and leading
potentially
to unintended results. The approach of placing control in the States, these 20
************
18 See,
e.g., 57th Cong., 1 Sess
(1902): H.R. 52, H.R. 63, H.R. 125, S. 595, H.R. 7676,
H.R.
9676, and S. 3057; 56 Cong., 2d Sess. (1901): H.R. 13846, S. 5833, H.R. 13993,
H.R. th
14072,
H.R. 14088, H.R. 14165, H.R. 14192, H.R. 14203, H.R. 14241, H.R. 14250, H.R.
14280,
H.R.
14388; 56 Cong., 1 Sess. (1900): S. 205, H.R. 5022; 55 Cong., 3d Sess. (1899):
H.R. th st th
11795;
55 Cong., 2d Sess. (1898): S. 4017, H.R. 9994. S. 3057 is the bill that
ultimately th
became,
as amended, the Reclamation Act.
19 See
H. Rep. No. 57-1468, at 3-4
(1902); S. Rep. No. 57-254, at 5 (1902); see also 35
Cong.
Rec. 6675-76 (1902) (Cong. Mondell); id.
at 6673, 6734 (Cong. Newlands); id.
at 6673
(Cong.
Shafroth); id.
at 6740 (Cong. Reeder).
20 President
Roosevelt, a main supporter of this approach, stated in a 1901 message to
Congress
that “[t]he distribution of the water, the division of the streams among
irrigators,
should
be left to the settlers themselves in conformity with State laws and without
interference
with
those laws or with vested rights.” 35 Cong. Rec. 6775 (1902). Senator Clark of
the
chief senatorial sponsor of S. 3057, which became the Reclamation Act,
disclaimed the
notion
that “a great Government bureau . . . shall have control of all the . . .
waters in our arid
regions.”
35 Cong. Rec. at 2222. In a floor statement, he further explained –
The
question of the conservation of waters is one of national importance; the
question
of reservoir sites and reservoir building is one that appeals to the
Government
as a matter of national import, but the question of State or Territorial
control
of waters after having been released from their bondage in the reservoirs
which
have been provided is a separate and distinct proposition. . . . [I]t is right
and
proper that the various States and Territories should control in the
distribution.
The conditions in each and every State and Territory are different.
What
would be applicable in one locality is totally and absolutely inapplicable in
another.
. . . [T]o take from the legislatures of the various States and Territories,
the
control of this question at the present time would be something little less than
suicidal.
They are the men qualified to deal with the question, the laws are written
upon
their statute books and read of all men . . . .
Mondell)
(asserting that section should “reserv[e] control of the distribution of water
for
irrigation
to the respective States and Territories); id.
at 6678 (Cong. Mondell); id.
at 6672-73
(Cong.,
Shafroth); id.
at 6748 (Cong. Glenn); id.
at 6752 (Cong. Jones); id.
at 6763 (Cong.
Mercer);
id.
at 6770 (Congressman Sutherland) (“if the appropriation and use were not under
the
provisions
of the State law the utmost confusion would prevail”); id.
at 6728 (Cong. Burkett).
Case
legislators
emphasized, had been adopted by Congress in passing the Mining Acts of 1866 and
1870,
and the
The
legislative history – not to mention the statutory language – reflects that
the latter
view
won out. In this regard, the relevant Senate Report provided that “[b]y
section 8 there is to
.
. . be no interference with State or Territorial laws on the subject of
irrigation.” S. Rep. No.
254,
supra,
at 2. The accompanying House Report, in much greater detail, adumbrates that
“[s]ection
8 recognizes State control over waters of nonnavigable streams such as are used
in
irrigation,
and instructs the Secretary of the Interior in carrying out the provisions of
the act to
conform
to such laws.” H. Rep. No. 1468, supra,
at 6. It emphasizes that “nothing in the act
shall
be held as changing the rule of priorities on interstate streams,” id.
at 6, noting further that
“[u]nder
this section uniformity of record of the rights is secured and the rules of
priorities of
rights
are not disturbed,” id.
at 7. Describing the Federalism balance struck by the legislation,
this
same report reveals that the portions of section 8 requiring appurtenancy and
beneficial use,
together
with those in section 5 of the Reclamation Act, limiting, for example, the size
of certain
irrigated
parcels to 160 acres, were designed not to supplant state water law, but rather
to ensure
that
under that law, monopolistic ownership of public waters (and eventually the
lands associated
therewith)
would not occur.
insure
the user in his right and prevent the possibility of speculative use of water
rights”). 22
************
21 See
Mining Act of 1866, ch. 262,
14 Stat. 251, 253, (1866), as amended by Act of July
9,
1870, ch. 235, 16 Stat. 217, 218 (1870) (protecting a miner’s claim to water
to the extent
based
on “local customs, laws, and the decisions of the courts”); Desert Land Act
of 1877, 19
Stat.
377 (1877) (settlers’ water right “shall depend upon bona fide prior
appropriation”); see
also
35 Cong. Rec. 6678 (Cong.
Mondell) (noting the desire to “follow[] the well-established
precedent
in national legislation of recognizing local and State laws relative to the
appropriation
and
distribution of water”);
these
statutes); California
Oregon Power Co. v. Beaver Portland Cement Co., 295
153-58
(1935) (same).
22 See
also 35 Cong. Rec. 6679
(1902) (Cong. Mondell) (provision designed to prevent
“the
evils which come from recognizing a property right in water with power to sell
and dispose
of
the same elsewhere and for other purposes than originally intended”); 35 Cong.
Rec. 2222-23
(1902)
(Sen. Clark) (indicating that these provisions were designed to prevent “large
areas of
public
domain” from being “placed in the hands of the larger corporate
interests”). Subsequent
Supreme
Court cases construed these limitations consistent with this legislative
history. See,
e.g.,
Bryant v. Yellen, 447
open
project lands to settlement by farmers of modest means, insures wide
distribution of the
benefits
of federal projects, and guards against the possibility that speculators will
earn windfall
profits
from the increase in value of their lands resulting from the federal
project”); Ivanhoe
Irrig.
Dist. v. McCracken, 357
people,
not land”).
Case
Indeed,
the House Report anticipated that the Secretary would not begin construction of
works
for
the irrigation of lands in any State or Territory “until satisfied that the
laws of said State or
Territory
fully recognized and protected water rights of the character contemplated.”
Recounting
this legislative history, the Supreme Court, in
that
“the Act clearly provided that state water law would control in the
appropriation and later
distribution
of the water.” 438
Chief
Justice, Rehnquist emphasized that “[f]rom the legislative history of the
Reclamation Act
of
1902, it is clear that state law was expected to control in two important
respects.”
“First,”
he noted, “the Secretary would have to appropriate, purchase, or condemn
necessary
water
rights in strict conformity with state law.” Id.
Repudiating dicta
in earlier cases, Justice
Rehnquist
then dismissed the notion that state law control over the appropriation of water
was a
mere
technicality, in the process making short shrift of the argument that Ҥ 8
merely require[s]
the
Secretary of the Interior to file a notice of his intent to appropriate but to
thereafter ignore the
substantive
provisions of state law.” Instead, he found that the legislative history made
it
“abundantly
clear that Congress intended to defer to the substance, as well as the form, of
state
water
law.”
Justice
Rehnquist continued, “once the waters were released from the Dam, their
distribution to
individual
landowners would again be controlled by state law.”
only
exceptions to these rules, he indicated, were two specific provisions of the
Reclamation Act
that
were to govern to the extent inconsistent with state law: section 5, which
forbade the sale of
reclamation
water to tracts of land of more than 160 acres, and section 8 of the Act, which
required
that the water right must be appurtenant to the land irrigated and governed by
beneficial
use.
question
is a matter of state, not federal, law. Consistent with this view and the
statute’s
legislative
history, courts and commentators alike have viewed the appurtenancy/beneficial
use
clause
at the end of section 8 merely as an overlay to state law, designed to prohibit
monopolistic
control
over western waters. If the law were otherwise, a property owner could claim
water 23
************
23 See,
e.g.,
Peterson
v. United States Dept. of Interior,
899 F. 2d 799, 802 (9 Cir.), cert.
denied,
498
projects
not fuel land speculation in the West or contribute in any way to the
monopolization of
land
in the hands of a few private individuals.”); Joseph L. Sax, “Problems of
Federalism in
Reclamation
Law,” 37 U.
“designed
to insure that the benefits of federal irrigation programs went to, and stayed
with,
small
family farmers, and that water did not fall into the hands of large speculators
and
corporations”);
Paul S. Taylor, “The Excess Land Law: Execution of a Public Policy, 64 Yale
L.J.
477, 483-86 (1955) (the Reclamation Act was “drawn with unusual care to
prevent
monopoly
of water on reclaimed public lands”).
Case
rights
under section 8 solely based upon appurtenancy and beneficial use, even without
a contract
or
some other arrangement to receive project water. Yet, such naked claims have
been rejected
by
courts holding that the appurtenancy and beneficial use concepts of section 8
only apply to
properties
otherwise entitled to receive distributions of project water. Thus, for example,
in
explained
–
[T]he
beneficial use requirement occurs only in the context of determining how
much
water duty is appropriate for lands already
entitled to receive
Project water.
Section
8 of the Act strictly limits the beneficial use concept to properties that are
entitled
to receive Project water. Section 8 explains that beneficial use is the
measure
of the right to the use of water acquired
under the provisions of this Act.
The
critical defect with the transferee properties involved in this case, however,
is
that
they generally have no right to receive Project water. The landowners do not
hold
contracts or certificates entitled their properties to be irrigated. The
beneficial
use discussion . . . is therefore of no consequence to the presumed right
of
transferee properties to receive transferred water rights.
F.3d
1154, 1163 (9 Cir. 2004); Reed D. Benson, “Whose Water Is It? Private Rights
and Public th
Authority
Over Reclamation Project Water,” 16
Seeking
to sidestep the
cases
– Ickes v. Fox,
300 U.S. 82 (1937), Nebraska
v. Wyoming, 325 U.S. 589
(1945) and
Reclamation
Act establishes a federal property right to the use of water in the case of
irrigation
appurtenant
to the land, subject to beneficial use. But, even a cursory review of these
cases
reveals
that they hold nothing of the sort, but rather merely reflect the perceived
result of the
interaction
between the Reclamation Act and the particular laws of the states involved.
Given
the
importance of this point, a few words of elaboration are in order.
Plaintiffs
cite statements in these cases describing water rights associated with
reclamation
projects and arising out of appurtenancy as “the property of the land
owners,” Ickes,
Case
300
the
126.
But, read in context and in their entirety, these statements only describe
either: (i) the
impact
of section 8 on water rights that were deemed established under state law; or
(ii) the fact
that
that section does not confer independently any significant interest in the
reclamation waters
upon
the
States
was not an indispensable party to a lawsuit brought by farmers in
Bureau.
Ickes,
300
of
the water rights at issue, the Court rejected the government’s reliance upon
the Reclamation
Act
and instead relied on contracts and a
the
use of water which has been applied to a beneficial use in the state shall be
and remain
appurtenant
to the land or place upon which the same is used.” 300
of
7391,
vol. 8, p. 425). Likewise in
waters
of the
United
States any water rights, and instead looked to state law on appropriation to
determine the
existence
and nature of the property interest at issue in those cases.
15.
Applying
to
the Secretary of the Interior to proceed in conformity with state laws in
appropriating water for
irrigation
purposes,” and stated that it “intimate[d] no opinion whether a different
procedure
might
have been followed so as to appropriate and reserve to the
rights,”
noting that “[n]o such attempt was made.”
Court,
reaffirming its decision in
beneficial
use gave rise to private rights in water. 463
ultimately
resolved this case, which involved an attempted reallocation of reclamation
water
rights,
based upon res
judicata principles.
While
these cases certainly hold that section 8 does not confer water rights on the
United
States,
that conclusion did not spring from the notion that section 8, rather than state
law,
somehow
grants those rights to other parties. Indeed, few, if any, broad principles can
be
distilled
from the Court’s comments on the state water rights at issue in these cases
because those
comments
depended upon several key assumptions. In Ickes,
those assumptions derived from the
procedural
posture of the case – the sovereign immunity question presented involved a
motion to
dismiss,
requiring the Court, under familiar rules, to treat the allegations made in
plaintiffs’
amended
bills of complaint as true, including those involving their claimed water rights
and
those
of the
See
involving
the Act at all was Ickes
. . . and the first case to
require construction of § 8 of the Act
was
United
States v. Gerlach Live Stock Co.,
supra,
decided nearly half a century after the
enactment
of the 1902 statute”). Likewise, in both
operative
portions of those opinions focused not on whether the parties competing with the
Case
rights
were affected by the Reclamation Act (and the Desert Land Act before it) and
whether the
undertook
a comprehensive review of the laws of the states in question, nor addressed
whether
the
procedure.
See, e.g.,
Nebraska, 325
To
the extent that these cases may be viewed as construing the interrelationship
between
state
laws and the overlaying principles of section 8, they say virtually nothing
about the
interaction
between section 8 and the underlying provisions of
at
issue here. Suggestions in the Ickes
line that there is a uniform
body of western water rights
law
must be viewed cautiously, recognizing that the laws in these States largely,
but not
completely,
overlap. Because those differences sometimes are pronounced – particularly, as
they
apply
to the
the
reclamation water rights owned by an individual in one state from cases
involving the laws of
another
state is perilous, at least until relevant congruencies between the two regimes
have been
established.
The Court had no need to make the latter type of comparison in any of the Ickes line
of
cases, and did not do so. Nor did any of these cases mention, even in passing,
the laws of
hint
that any of those cases remotely considered laws similar to those specifically
governing
reclamation
in the two states at issue here. Perhaps for these reasons, in trumpeting
certain 25
************
24 In
Ickes,
300
motion
to dismiss, which “concede[d] the truth of” plaintiff’s allegations that
“their water-rights
ha[d]
become vested” under state law. The Court indicated that given the procedural
posture,
even
if those allegation had been denied, “we should still be obliged to indulge
the presumption
.
. . that respondents might be able to prove them.”
the
Court based its decision, in part, on the premise that “the water rights on
which the North
compliance
with state law.” The Court found that Congress, in passing section 8, had
chosen to
require
the Secretary to ensure that “projects were designed, constructed and
completed
according
to the pattern of” state appropriation laws, and found that the Secretary,
indeed, had
complied
with these laws by obtaining permits from state officials.
Government
resided in the owners of the [appurtenant] land,” observing “[a]s in Ickes v. Fox
and
Nebraska
v. Wyoming, the law of the
relevant State and the contracts entered into by the
landowners
and the
25 At
oral argument, plaintiffs’ counsel asserted that the laws of
pertinent
respects, the laws of the states involved in
proposition,
however, is not borne out by the copies of the state statutes which plaintiffs
provided
subsequent
to the argument. Any notion that the water laws of the Western States are
uniform
can
be readily dispelled by even a cursory review of Wells A. Hutchins’s seminal
treatise Water
Rights
Laws in the Nineteen Western States,
which dedicates three volumes and approximately
2,000
pages to describing, in magisterial detail, the many variations in water laws
and water
rights
in those states. Notably, Hutchins divides the
into
three broad groups –
triumvirate
of Supreme Court cases on which plaintiffs rely. See
Wells A. Hutchins, I Water
Rights
Laws in the Nineteen Western States 2-3
(1971); see also, e.g., 1 Waters and Water Rights
§
8.02 (Robert E. Beck, ed. 1991) (providing “a State-by-State account of the
adoption of
appropriative
rights or of dual [appropriation and riparian] systems” in the Western States,
and
dividing
those states’ water laws as falling into three broad categories); 6 Waters and
Water
Rights,
Part XI, Subpart B (Robert E. Beck, ed. 1991) (summarizing the differences and
similarities
among the water laws of all 50 states); David Getches, Water Law In a Nutshell
192
(1984).
Case
statements
from the Ickes
line of cases, plaintiffs
gloss over the associated references to
individual
state laws, not to mention the many qualifiers and caveats that the Supreme
Court
employed
in indicating, for example, that a given rule “generally” applied in Western
States or
represented
an approach held “in common with most other states.” With these
qualifications 26
restored,
the Ickes troika
hardly provides an analytical stepping stone from which to leap to the
conclusion
that Congress, in passing the reclamation laws, intended to create usufructuary
rights
independent
of state law.
Finally,
plaintiff’s construction of the Ickes
line of cases runs headlong
into a wide range
of
precedent. Certainly, nothing in these cases conflicts with the Supreme
Court’s holding in
distribution
of water, and any rights inherent in these functions. Plaintiffs are left to
argue that
Ickes
and
(and
later) decision. That bit of ipse
dixit is dubious enough on
its face, let alone if one gives
those
cases the broad compass plaintiffs would afford them – a compass that would
inevitably
bring
them all the more into conflict with
five
years after
be
described as unrealistic – 70 years of decisions in the Supreme Court and
elsewhere, which 27
28
************
26 See
(with emphasis added):
common
with most other western States,
requires for the perfection of a water right for
agricultural
purposes that the water must be beneficially used by actual application on the
land”);
Ickes,
300
the
right to the use of water can be acquired only by appropriation for beneficial
use”); see also
Arizona
v. California, 460
27 See
Bryant v. Yellen, 447
rights
is to be found in state law”); City
of Fresno v. California, 372
effect
of § 8 in such a case is to leave to state law the definition of the property
interests, if any,
for
which compensation must be made”); United
States v. Gerlach Live Stock Co.,
339
734
(1950) (under the reclamation laws, “Congress proceeded on the basis of full
recognition of
water
rights having valid existence under state law”); Silas
Mason Co. v. Tax Comm’n of State of
conformity
with the state laws in carrying out the provisions of the act and provided that
nothing
therein
contained should be construed as interfering with the laws of the State relating
to the
control,
appropriation, use or distribution of water used in irrigation”); Nebraska
v. Wyoming,
295
so
as to impound and release waters of the river are subject to the authority of
also
California v. FERC, 495
applies
to the Reclamation Act of 1902).
28 See,
e.g., Westlands Water Dist. v. Natural Resources Defense Council,
43 F.3d 457,
461
(9 Cir. 1994) (subjecting the
provisions
of
Alpine
Land and Reservoir Co., 887
F.2d 207, 212 (9 Cir. 1989) (concluding that “[s]tate law th
regarding
the acquisition and distribution of reclamation water applies if it is not
inconsistent
with
congressional directives”); Jicarilla
Apache Tribe v. United States,
657 F.2d 1126, 1133
(10
Cir. 1981) (“[i]t generally can be said that state law governs the
distribution of water from th
federal
projects unless Congress expresses a different approach”); Grey
v. United States, 21 Cl.
Ct.
285, 295 (1990) (quoting
provides
that “state water law would control in the appropriation and later
distribution of
[Reclamation
Project] water”); Kandra
v. United States, 145 F.
Supp. 2d 1192, 1201 (D. Or.
2001)
(“[u]nder federal reclamation law, the Secretary of the Interior is required
to proceed in
conformity
with state laws with respect to the control, appropriation, use, or distribution
of water
used
in irrigation”); Westlands
Water Dist. v. United States,
805 F. Supp. 1503, 1509 (E.D. Cal.
1992)
(“federal reclamation projects must be operated in accordance with state water
law, when
not
inconsistent with congressional directives” and requires the
state’s]
appropriative water rights hierarchy”).
Case
have
consistently construed the Reclamation Act as deferring to state law in
determining who has
interests
in reclamation waters, prove that notion false. In the last analysis, to rule in
plaintiffs’
favor
on this issue, this court would not only have to defenestrate this authority,
contraindications
in
the Ickes cases
themselves, see, e.g.,
head,
treating the majority of the language therein not as the embodiment of an
important
Case
principle
of cooperative Federalism, but rather as an empty formalism. While plaintiffs
may 29
cling
to such a res ficta,
it remains that Congress enacted no such fantasy.
As
such, it is apparent that this court must proceed to consider state law in
determining
whether
plaintiffs have property rights in the waters of the Klamath Project.
A.
State
Law
Under
the umbrella of the prerogatives created by the Reclamation Act, the States, in
the
years
following the passage of the Act, began to pass reclamation legislation, often
prompted by
the
desire of luring a project within their borders. Defendant claims that it owns
controlling
rights
to the Klamath Project water based upon one such statute, the Act of the
of
Whenever
the proper officers of the
works
for the utilization of water within this State, shall file in the office of the
State
Engineer a written notice that the
specified
waters, the waters described in such notice and unappropriated at the
time
of the filing thereof shall not be subject to further appropriation under the
laws
of this state, but shall be deemed to have been appropriated by the United
States;
provided, that within a period of three years from the date of filing such
notice
the proper officer of the
works
in the office of the State Engineer for his information; and provided further,
that
within four years from the date of such notice the
authorize
the construction of such proposed work. No adverse claims to the use
************
29 In
searching vainly for evidence of a more sweeping interpretation of the Ickes
line of
cases,
plaintiffs rely on documents issued by the Solicitor and a Regional Solicitor of
the
Department
of the Interior in 1989 and 1995, respectively. But, even these documents
recognize
that
the determination and distribution of water rights in reclamation projects is
dependent upon
state
law. See, e.g.,
Memorandum from the Regional Solicitor, Pacific Southwest Region to the
Regional
Director, Bureau of Reclamation, Pacific Southwest Region 2 (
Moreover,
in a 1933 decision, the Department of Interior opined that the
the
waters of the
documents
cited by plaintiff were not arrived at through formal adjudication or notice-andcomment
rule
making and thus do not represent any agency's formal position on this issue. See
United
States v. Mead Corp., 533
agency's
formal position, it is beyond peradventure that an agency may change its mind,
provided,
critically, its new position is supported by the law. Good
Samaritan Hosp. v. Shalala,
508
(1957).
In the court’s view, the latter requirement has been met here.
Case
of
the water required in connection with such plans shall be acquired under the
laws
of this State except as for such amount of said waters described in such
notice
as may be formally released in writing by an officer of the
thereunto
duly authorized, which release shall also be filed in the office of the
State
Engineer.
Or.
Gen. Laws, 1905, Chap. 228, §2, p. 401-02. In a separate 1905 law, the Oregon
Legislature
also
authorized the raising and lowering of
allowed
the use of the bed of
“ceded
to the
uncovered
by the lowering of the water levels, or by the drainage of any or all of said
lakes not
already
disposed of by the State.” Or. Gen. Laws, 1905, ch. 5, §§ 1-2, p. 63-64. 30
In
February of 1905, the Congress authorized the development of the Klamath
Irrigation
Project.
Act of
1905,
the
Notice
is hereby given that the
waters,
as follows, to-wit: All of the waters of the
constituting
the entire drainage basins of the
all
of the lakes, streams and rivers supplying water thereto or receiving water
therefrom,
including the following and all their tributaries . . . [listing tributaries].
It
is the intention of the
streams,
marshes and all other available waters lying or flowing therein.
That
the
of
works for the utilization of water in the state of
the
act of Congress approved
Reclamation
Act.
************
30 On
“[t]hat
for the purpose of aiding in the operations of irrigation and reclamation
conducted by the
Reclamation
Service of the
water
levels of any or all of the following lakes: Lower or Little Klamath lake, Tule
or Rhett
lake,
Goose lake, and Clear lake, . . . and to use any part or all of the beds of said
lakes for the
storage
of water in connection with such operations.” 1905 Cal. Stat., p.4. The
statute also
“ceded
to the
uncovered
by the lowering of the water levels, of any or all of said lakes, not already
disposed of
by
this state.”
Case
In
addition, the Bureau posted notices of appropriation for the
from
purchase
from private parties, water rights with earlier priorities for the benefit of
the Klamath
Project.
Every
indication is that the May 1905 notice triggered the provisions of the 1905
legislation,
thereby vesting in the
associated
with the Klamath project that were unappropriated as of the date of the filing.
This 31
conclusion
is confirmed by In
re Waters of the Umatilla River,
168 P. 922, 925 (Or. 1917), in
which
the Oregon Supreme Court held that, under the 1905 legislation, a similar notice
by the
By
the statute quoted in the previous opinion the Legislature withdrew from
further
appropriation the waters of such streams as the
to
utilize in the manner therein pointed out. The
grant
and conformed to the terms thereof. The Legislature could not displace
water
rights which had vested prior to the acceptance by the
provisions
of the statute, but the plain precept of the law vests the
with
title to all waters not theretofore appropriated. The claim of the government
.
. . must be sustained, regardless of the diligence of the government in matters
not
specified in the statute, and regardless of the amount of water required to
irrigate
the lands served by the government ditches.
In
re Waters of Umatilla River,
172 P. 97, 100 (Or. 1918); see
also Paul S. Simmons,
“Klamath
Basin:
Endangered Species Act and Other Water Management Issues,” SJ023-ALI-ABA 127,
133
(2003) (hereinafter “Simmons”) (noting that via the notice, “under
thus
‘deemed appropriated’ and unavailable for other uses”). Commenting on
these opinions, as
well
as the 1905 Act, a 1933 decision of the United States Department of the Interior
stated –
“This
section of
Umatilla
River . . . in which it was
held that the right of the
with
this act to all the waters not then appropriated is not affected by its lack of
diligence in
completing
its project or by the fact of all the waters not being required to irrigate the
lands
served
by its ditches, these matters not being conditions of the statute.” Water
Rights on Lower
************
31 It
should be noted that the
the
1905
Klamath
Irrigation Project with the State Engineer. And, on
of
authorization to construct the necessary works. On
supplemental
plans with the State Engineer.
Case
the
United States by the State of
agricultural
purposes was plenary as to its use. . . .”
In
arguing to the contrary, plaintiffs place stock in a 1950 Oregon Attorney
General
opinion,
which found that the
unappropriated
water of the
extent
the
Opinion
No. 1583, 25 Op. Atty. Gen. 62 (
use”
concept limits the scope of the rights obtained by the
paving
the way for them to assert contrary interests under state law. Per
contra. To the extent
the
1950 opinion may be viewed as applying such a use limitation to the
inconsistent
not only with the plain language of the 1905 Act, but also with the holding in 33
Umatilla,
supra,
that the
amount
of water required to irrigate the lands served by the government ditches.” 172
P. at
100.
Perhaps not coincidentally, the 1950 opinion clashes with at least four earlier
opinions of 34
************
32 Although
research reveals no other case that has directly examined this issue, a number
of
prior opinions proceeded from the uncontested assumption that the United States,
in 1905,
appropriated
all unappropriated water rights in the Basin. See
Klamath Water Users Protective
Ass’n
v. Patterson, 204 F.3d 1206,
1209 (9 Cir. 2000) (“In 1905, in accordance with state water
law
and the Reclamation Act, the
water
diversion projects.”); Kandra,
145 F. Supp. 2d at 1196 (same); PCFFA,
138 F. Supp.2d at
1230
(same); Klamath
Water Users Ass’n v. Patterson,
15 F. Supp. 2d 990, 991-92 (D. Or. 1998)
(same).
Moreover, other state courts construing state law provisions identical to the
have
similarly concluded that the
in
given reclamation water simply by filing an appropriate notice. See
Resources
Bd. v. Foss Reservoir Master Conservancy Distr.,
527 P.2d 162, 163-65 (
City
of
(federal
government granted “appropriative water rights to unappropriated water simply
by filing
notice
of intent to utilize it”).
33 In
holding that interests adverse to those of the
under
state law, the 1950 opinion not only clashes with the portion of 1905 Act that
provides
waters
appropriated via the notice “shall not be subject to further appropriation
under the laws of
this
state,” but also with the portion that states “[n]o adverse claims to the
use of the water
required
in connection with such plans shall be acquired under the laws of this State”
except as
“may
be formally released in writing by an officer of the
34 The
1950 opinion appears to proceed from the mistaken view that the Ickes
line of
cases
somehow overruled the opinions in Umatilla,
supra, thus adopting the same
overlyexpansive
interpretation
of the Ickes
line that underlies
plaintiffs’ claims here. See
25 Op. Atty.
Gen.
at 64. While the opinion also makes a glancing reference to the “beneficial
use” language
in
section 8, id.
at 63, any notion that the latter section somehow trumps the 1905 Act ignores
not
only
the legislative history of that section, which focuses on preventing
monopolistic control by
private
entities, but also the Supreme Court’s admonition that, in implementing the
reclamation
laws,
the Secretary should “follow state law in all respects not directly
inconsistent with the[]
directives”
of section 8.
viewed
as being “directly inconsistent” with the “beneficial use” requirement
of section 8, it also
would
be directly inconsistent with section 8's requirement that water rights be
“appurtenant to
the
land irrigated.” The result would be to render the entire 1905 Act invalid.
Plaintiffs do not
make
this argument, perhaps recognizing that Congress did not intend the appurtenancy/
beneficial
use clause of section 8 to be wielded in this disruptive fashion.
Case
the
Oregon Attorney General. The first of these, issued in 1925, ordered the State
Engineer to
revoke
a water permit that had been provided to a power company, finding, based upon
the 1905
Act,
that “[i]t is clear, therefore, that the waters of
favor
of the federal government and that no private person or corporation can acquire
the right to
the
use of any thereof except such as may be hereafter specifically released by the
federal
government.”
Op. Or. Atty. Gen. 321, 322 (
in
opining against a power company’s application for a water appropriation,
discussed, at length,
the
1905 Act and the Umatilla
opinions, finding that
“based upon the statute as interpreted by the
supreme
court,” “without release by the federal government,” there was no water
“subject to
appropriation
at this time.” Op. Or. Atty. Gen. 43, 47 (
in
1931, when requested to comment on bills involving the Klamath waters pending
before the
supreme court in the case of In re Waters of Umatilla River <