Petition — Tulare Lake Canal Co. v. United States

Office - Supreme Court, US. ]

FILED .

Supreme Court of the United States

ALEXANDER L. s TEVAS.

’ *

iit 1)

October Term, 1982

TULARE LAKE CANAL COMPANY and TULARE LAKE BASIN

WATER STORAGE DISTRICT,

Petitioners,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT.

ROBERT M. NEWELL, Eso.,

650 S. Grand Avenue,

Suite 500,

Los Angeles, Calif. 90017,

(213) 629-1231,

Attorney for Petitioners.

Of Counsel:

James G. McCAIn, Esa.,

P.O. Box 475,

Corcoran, Calif. 93212,

(209) 992. 414,

ERNEST M. C' ARK, JR., Esq.,

707 Wilshire Boulevard,

Suite 3200,

Los Angeles, Calif. 900!7,

(213) 626-0211.

Parker & Son, Inc., Law Printers, Los Angeles. Phone 724-6622

Questions Presented.

Since this matter comes before the Court in a rather un-

usual fashion, it is appropriate to summarize the procedural

history of this matter in order that the questions raised in

this petition can be placed in their proper perspective.

TABLE OF CONTENTS

Page

SR IER, 2h cechetbianhonsdocssacegabiien l

al l

ET Si icnctncvadscngndibidibnnddabandessdlbheoinesons 2

Procedural History of This Case ..................c0c0000. 2

SI siciccnnckbipigtianiiigd bduintiiimanveteedédésoooseiie 5

Water Rights in the Kings River .....................0000 6

ND lacs srisncinsccbtcncnsscescsiainnss 6

IID snnciccescntbiviasinindsinastopaseteedaess 7

I EINE stitnthinboctiinpadpitbievtntentessnebaiocenesin 7

Reasons for Granting the Writ ......................0ce000 11

I

The Court of Appeals Has Decided a Federal Question

in a Way in Conflict With Applicable Decisions

A te GE pnccndteitustncdintetinctieecsscesibaccotec 11

A. California Effectively Overruled Tulare! ... 11

B. Tulare II Is Contrary to Bryant v. Yellen,

TL dciddiaadundsbededsoniptirieantesecnctetasess 18

te deamecenbliee 22

A. Were the Petitioners Denied Due Process of Law

by Virtue of the Fact That the Court of Appeals

Refused to Pass Upon the Validity of the Peti-

tioners’ Estoppel Defense Which They Had Es-

tablished in the District Court .................... 22

B. It Is Unconstitutional for the United States to

Enforce Acreage Limitations on Conservation

Storage in Flood Control Reservoirs West of the

100° Meridian but Not East Thereof ............. 24

Page

C. ItIs Unconstitutional for the Federal Government

to Pursue a Policy of Land Reform in the West

Through the Agency of the 160-Acre

DEIN neisidddennpadbiapetinredubansesicteiningece 26

INDEX TO APPENDICES

Exhibit A. Findings of Fact, Conclusions of Law and

Judgment Entered by the District Court in This

SIEE .nohstntganedeginncdeptepbinapionisetiinincdsedh App. p. |

Exhibit B. Opinion of the United States Court of Ap-

ees Far Gee PEs CHG 2.02. cesscccececcsessecscsseses 22

Wallace Circuit Judge, Concurring .................++. 33

IE re PI rs cdinicccticnsancasdedocsccicvescsvicees 37

iv

TABLE OF AUTHORITIES CITED

Cases Page

Bryant v. Yellen, 447 U.S. 352 (1980) ..................

pesupeeddentensvsenegeesouneees 5, 7, 18, 19, 20, 21, 22, 28

California v. United States, 438 U.S. 645

EE sicosuthicidbdeeues 5, 7, 12, 14, 15, 16, 17, 25, 28

Consolidated Peoples Ditch Company v. Foothill Ditch

Company (1928) 205 Cal. 54 ...............cceeeeeeeees 16

Ivanhoe Irrigation District v. McCracken, 357 U.S. 275

SE ididisquincbadenaibientineahebaetdededuesuecte 11, 12

Kansas v. Colorado, 206 U.S. 461 (1907) .............. 26

McCullough v. Maryland, 4 Wheat. 316, 4 L.Ed. 579

SUUUE. 0scbnvsetadidibintculiacelbeenscthdcevetsantevedaieves 27

United States v. Butler, 297 U.S. 1 (1937) ............. 27

United States v. Tulare Lake Canal Co., 535 F.2d 1093

SE GANS WEP NE UD edecndncccesicoedsonsernccscines

seieeaiaiilildeniiniaasiainiaaineeg 4,5, 7, 11, 12, 14, 17, 23, 26

Statutes

Boulder Canyon Project Act, Sec. 6 ................ 19, 20

Flood Control Act of 1944, Sec. 8, 58 Stat. 887 (43

Tan GED scecsdstsccntsiceece 4, 7, 8, 17, 19, 20, 25

Flood Control Act of 1944, Sec. 10, 58 Stat. 887,

EG cncvecsespenqesccentenenesptcscpeeeees 2, 8, 9, 15, 16, 17

Omnibus Adjustment Act of May 25, 1926, Sec. 46,

44 Stat. 649 (43 U.S.C. §$423(e)) ............. 9, 10, 11

Reclamation Act of 1902, Sec. 8, 32 Stat.

SP ddisbindedepaltedssteh ciieadibucsescabdnevectotns 11, 13, 16

SS Statutes at Lange, Sec. S91 .............ccccscccccsceees 2

58 Statutes at Large, Sec. SO] ...............scecescecseees 2

United States Code, Title 28, Sec. 1254(1) ............. 2

United States Code, Title 28, Sec. 1345 ................ 2

No. ..-...

IN THE

Supreme Court of the United States

October Term, 1982

TULARE LAKE CANAL COMPANY and TULARE LAKE BASIN

WATER STORAGE DISTRICT,

Petitioners,

vs.

UNITED STATES OF AMERICA,

Respondent.

PETITION FOR A WRIT OF CERTIORARI TO THE

UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT.

Petitioners Tulare Lake Canal Company and Tulare Lake

Basin Water Storage District respectfully request that a writ

of certiorari issue to review the judgment of the United

States of Appeals for the Ninth Circuit entered on May 17,

1982.

OPINIONS BELOW.

The opinion of the Court of Appeals dated May 17, 1982

appears in a seperate appendix to this petition as Exhibit B.

The findings of fact and conclusions of law of the United

States District Court for the Eastern District of California

appear in the appendix as Exhibit A. The opinion of the

District Court, reported at 340 F. Supp. 1185 (1972) appears

in the appendix as Exhibit C.

_

JURISDICTION.

The judgment of the Court of Appeals was entered on

May 17, 1982. The jurisdiction of this Court is invoked

under 28 U.S.C. § 1254(1). Jurisdiction of the District

Court was based on 28 U.S.C. § 1345.

PROCEDURAL HISTORY OF THIS CASE.

Section 10 of the Flood Control Act of 1944 authorized

the construction of the Pine Flat Dam in the following

language:

7 project for flood control and other purposes for

the King’s River and Tulare Lake Basin is hereby au-

thorized substantially in accordance with the plans con-

tained in House Document Numbered 630 . . . Pro-

vided further, that the Secretary of War shall make

arrangements for payment to the United States by the

State or other responsible agency, either in lump sum

or on installments, for conservation storage, when used

.. .’’ (Emphasis supplied) (58 Stat 891, 901).

The Pine Flat Dam was completed in 1952. There ensued

a long-running argument between the United States and the

landowners as to how much the latter should pay the United

States for the conservation storage rights in the Pine Flat

Reservoir. The United States contended that the storage

rights were reasonably worth $20,000,000; the landowners

and the State of California took the position that the storage

rights were worth $10,000,000. This dispute was resolved

by Secretary of the Interior Milton A. Krug who ruled that

the landowners should pay the United States $14,250,000

for the storage rights.' The landowners were willing to pay

this sum to the government provided they were assured that

‘Although the 1944 Act directed the of War to negotiate

a contract with the landowners, President Harry S. Truman ordered the

Secretary of the Interior to assume that responsibility.

ailion

the 160-acre limitation of reclamation law would not apply

to their stored water. Several responsible officials of the

Department of the Interior represented to the landowners

that the 160-acre limitation would not apply to stored water

once they had paid the government $14,250,000 fixed by

Secretary Krug. Thereupon, a contract was negotiated be-

tween the United States and the landowners to reflect that

understanding. However, with the advent of the Kennedy

administration, the new Solicitor for the Department of the

Interior, Frank J. Barry, reversed the several rulings of his

predecessors and opined that acreage limitations should ap-

ply to privately owned water stored in the Pine Flat Res-

ervoir. An impasse resulted: the landowners refused to sign

a payment contract which imposed the 160-acre limitation

upon stored water and the government threatened to disallow

the landowners some $7,000,000 of credits toward their

principal obligation of $14,250,000, which they had ac-

quired through a series of annual interim storage contracts

with the United States. As a means of resolving this dispute,

the United States and the landowners agreed to submit this

question to the Courts for a decision. This lawsuit is that

““test case”’.

In order to present this issue before the Court, the peti-

tioner Tulare Lake Canal Company (‘‘Canal Company’’)

paid in full its share of the $14,250,000 allocated to con-

servation storage in the Pine Flat Reservoir, and, as required

by California law, the Canal Company delivered stored

water to its shareholders without regard to any restrictions

which would have been imposed had the 160-acre limitation

applied. The United States filed this action in 1963 by which

it sought an injunction against the Canal Company enforcing

the 160-acre limitation.

It was the position of the United States that section 8 of

the 1944 act imposed the 160-acre limitation on conservation

--4—

storage in the Pine Flat Reservoir. The petitioners asserted

Court found for the petitioners on statutory grounds. The

principal findings of the District Court were: (1) section 8

of the 1944 Act did not impose the 160-acre limitation upon

privately owned water stored in the Pine Flat Reservoir;

(2) if the 160-acre limitation ever did apply, the petitioners

were relieved of that obligation upon payment to the United

States of their share of the capital cost of the project allocated

to conservation storage; and (3) the United States was es-

topped to enforce the 160-acre limitation on the Pine Flat

issues tendered by the petitioners. 340 F. Supp. 1185 (E.D.

Cal. 1972).

The Court of Appeals reversed (535 F. 2d 1093 (9th Cir.

1976) (‘‘Tulare I’’)). The principal holdings of the Court

of Appeals were: (1) that section 8 of the 1944 Act imposed

the 160-acre limitation upon conservation storage in the Pine

Flat Reservoir; however, the landowners were free to take

their water under natural flow conditions free of the 160-

acre limitation and (2) that payment in full of the capital

cost of the project allocated to conservation storage would

not relieve the defendants of the burden of the 160-acre

limitations. The Court of Appeals did not refer to the es-

toppel defense nor any of the facts relevant thereto in its

On remand to the District Court, the petitioners moved

the Court to hold all matters in abeyance until the consti

tutional issues had been resolved. The Court granted the

petitioners’ motion. The government thereupon moved for

summary judgment on the constitutional issues. The Court

granted the government's motion. The petitioners appealed.

While the appeal on the constitutional issues was pending,

this Court reversed the Court of Appeals in two major water

Po

cases, California v. United States, 438 U.S. 645 (1978) and

Bryant v. Yellen, 447 U.S. 352 (1980). It is the view of the

petitioners that these two decisions effectively overruled

Tulare I. Accordingly, they moved the Court of Appeals

to recali its mandate in Tulare /.

The petitioners’ appeal on the constitutional issues and

their motion to recall the mandate were consolidated for

hearing before the Court of Appeals.

On May 17, 1982, the Court of Appeals affirmed the

District Court’s decision on the constitutional issues and

denied the petitioners’ motion to recall the mandate (*‘Tu-

lare IT’’). This petition requests the Court to review these

rulings.

There are certain terms used in this petition whose mean-

ing should be defined.

Petitioners.

(1) The Tulare Lake Canal Company is a California

mutual water company which delivers to its shareholders

through canals and works owned by it, Kings River water

appropriated under vested, non appurtenant water rights for

irrigation . . . The Company is one of the 28 entities which

have coatracted with the United States for the exclusive and

perpetual storage use of Pine Flat Dam for irrigation pur-

poses. such contracts in the aggregate exhausting the entire

capacity of Pine Flat Dam for the storage of water for

irrigation purposes.’

(Finding of Fact No. |, Appendix, p. 1).

(2) The Tulare Lake Basin Water Storage District is a

public entity organized in accordance with the laws of the

State of California. It holds a vested right to Kings River

*The Tulare Lake Canal Company has no subsidiaries and is not

a” a

and is one of the 28 entities which have contracted with the

United States for the perpetual and exclusive use of the Pine

Flat Reservoir for conservation storage. Its water rights are

allocated among the landowners within its boundaries in

proportion to the land they own.

(3) The Salyer Land Company is a California corpo.

ration which farms several thousands of acres of land in the

Tulare Lake Basin. Some of its land is located within the

boundaries of the Tulare Lake Basin Water Storage District.

Water Rights in the Kings River.

All of the water rights in the Kings River are vested in

the 28 diverting entities pursuant to the laws of the State

of California. With one exception, none of the 28 diverting

entities is a landowner. They are private stock companies,

or public entities such as irrigation districts or water storage

districts.

No landowner whose lands are appurtenant to the Kings

River has any appropriative right to any Kings River water

by virtue of riparian nature of his land. Every landowner

in the Kings River service who has a right to any Kings

River water holds that right because: (a) he owns stock in

a mutual water company, and/or (b) his land is located

within the physical boundaries of a public district. There

is no Kings River water available for appropriation by the

United States.

Conservation Storage.

Conservation storage refers to the storing of his water in

a flood control reservoir, in this case in the Pine Flat Res-

ervoir, by a private landowner who had a vested right to

that water when the Flood Control Act of 1944 was enacted.

The usual example of conservation storage is one where a

land owner will store a portion of his share of the flow of

atlas

the Kings River occasioned by the spring snow melt in the

Pine Flat Reservoir in order that he can use that stored water

to irrigate his crops later in the summer or fall.

Contrary to the situation in most of the country where the

rivers flow all year long, the Kings River in the normal

course of events would usually be dry, or at best, only a

small trickle by mid-summer. By storing some of his water

in the reservoir for use for irrigation later in that year, a

farmer can make much more efficient use of his Kings River

water for the growing of his crops.

Specifically, these questions are presented by the May

17, 1982 Opinion of the Court of Appeals:

1. Did California effectively overrule Tulare I?

2. Did Bryant effectively overrule Tulare /?

Constitutional Issues.

1. Were the petitioners denied due process of law by

virtue of the fact that the Court of Appeals refused to pass

upon the validity of the petitioners’ estuppel defense which

they had established in District Court?

2. Is it an invidious discrimination to impose the 160-

acre limitation on the conservation storage of privately

owned water in flood control reservoirs located west of the

100° meridian but not east thereof?

3. Is it constitutional for the Federal Government to

seek to use the 160-acre limitation as an agency for land

reform?

Statutes Involved.

Section 8 of the Flood Control Act of 1944, 58 Stat. 887,

891, 43 U.S.C. § 390, provides:

‘*Hereafter, whenever the Secretary of War deter-

mines, upon recommendation by the Secretary of the

Interior that any dam and reservoir project operated

enti

under the direction of the Secretary of War may be

utilized for irrigation purposes, the Secretary of the

Interior is authorized to construct, operate, and main-

tain, under the provisions of the Federal reclamation

laws (Act of June 17, 1902, 32 Stat. 388, and Acts

amendatory thereof or supplementary thereto), such

additional works in connection therewith as he may

deem necessary for irrigation purposes. Such irrigation

works may be undertaken only after a report and find-

ings thereon have been made by the Secretary of the

Interior as provided in said Federal reclamation laws

and after subsequent specific authorization of the Con-

gress by an authorization Act; and, within the limits

of the water users’ repayment ability such report may

be predicated on the allocation to irrigation of an ap-

propriate portion of the cost of the structures and fa-

cilities used for irrigation and other purposes. Dams

and reservoirs operated under the direction of the Sec-

retary of War may be utilized hereafter for irrigation

purposes only in conformity with the provisions of this

section, but the foregoing requirements shall not prej-

udice lawful uses now existing: Provided, That this

section shall not apply to any dam or reservoir here-

tofore constructed in whole or in part by the Army

Engineers, which provides conservation storage of

waier for irrigation purposes.”’

Section 10 of the Flood Control Act of 1944, 58 Stat.

887, 901 (the provision of the 1944 Act which gave specific

authorization for construction of the Pine Flat Dam, the

flood control project at issue in this case) provides, in per-

tinent part:

**The project for flood control and other purposes

for the Kings River and Tulare Lake Basin, California,

is hereby authorized substantially in accordance with

the plans contained in House Document Numbered

630, Seventy-sixth Congress, third session, with such

abiDnie

modifications thereof as in the discretion of the Sec-

retary of War and the Chief of Engineers may be ad-

visable at an estimated cost of $19,700,000: Provided,

That the conditions of local cooperation specified in

said document shall »ot apply: Provided further, That

the Secretary of War shall make arrangements for pay-

ment to the United States by the State or other re-

sponsible agency, either in lump sum or annual in-

stallments, for conservation storage when used: Provided

further, That the division of costs between flood con-

trol, and irrigation and other water uses shall be de-

ter~sined by the Secretary of War on the basis of con-

tinuing studies by the Bureau of Reclamation, the War

Department, and the local organizations.”’

Section 46 of the Omnibus Adjustment Act of May 25,

1926, 44 Stat. 649, 43 U.S.C. § 423(e), provides:

**No water shall be delivered upon the completion

of any new project or new division of a project until

a contract or controls in form approved by the Secretary

of the Interior shall have been made with an irrigation

district or irrigation districts organized under State law

providing for payment by the district or districts of the

cost of constructing, operating, and maintaining the

works during the time they are in control of the United

States, such cost of constructing to be repaid within

such terms of years as the Secretary may find to be

necessary, in any event not more than forty years from

the date of public notice hereinafter referred to, and

the execution of said contract or contracts shall have

been confirmed by a decree of a court of competent

jurisdiction. Prior to or in connection with the settle-

ment and development of each of these projects, the

Secretary of the Interior is authorized in his discretion

to enter into agreement with the proper authorities of

the State or States wherein said projects or divisions

are located whereby such State or States shall cooperate

eT

with the United States in promoting the settlement of

the projects or divisions after completion and in the

securing and selecting of settlers. Such contract or con-

tracts with irrigation districts hereinbefore referred to

shall further provide that all irrigable land held in pri-

vate ownership by any one owner in excess uf one

hundred and sixty irrigable acres shall be appraised in

a manner to be prescribed by the Secretary of the In-

terior and the sale prices thereof fixed by the Secretary

on the basis of its actual bona fide value at the date

of appraisal without reference to the proposed con-

struction of the irrigation works; and that no such ex-

cess lands so held shall receive water from any project

or division if the owners thereof shall refuse to execute

valid recordable contracts for the sale of such lands

under terms and conditions satisfactory to the Secretary

of the Interior and at prices not to exceed those fixed

by the Secretary of Interior: and that until one-half of

the construction charges against said lands shall have

been fully paid no sale of any such lands shall carry

the right ‘o receive water unless and until the purchase

price involved in such sale is approved by the Secretary

of the Interior and that upon proof of fraudulent rep-

resentation as to the true consideration involved in such

sales the Secretary of the Interior is authorized to cancel

the water right attaching to the land involved in such

fraudulent sales: Provided further, That the operation

and maintenance charges on account of lands in said

projects and divisions shall be paid annually in advance

not later than March 1. It shall be the duty of the

Secretary of the Interior to give public notice when

water is actually available, and the operation and main-

tenance charges payable to the United States for the

first year after such public notice shall be transferred

to and paid as a part of the construction payment.”’

REASONS FOR GRANTING THE WRIT.

1.

THE COURT OF APPEALS HAS DECIDED A FEDERAL QUES-

TION IN A WAY IN CONFLICT WITH APPLICABLE

DECISIONS OF THIS COURT.

A. California Effectively Overruled Tularc I.

Prior to this Court’s California decision, it was assumed

that the Federal Government was not obliged to comply

with state law when it undertook to develop a reclamation

project. This assumption was based in large measure on this

Court’s decisior in Ivanhoe Irrigation District v. Mc-

Cracken, 357 U.S. 275 (1958), which seemed to hold that

section 8 of the Reclamation Act of 1902 (32 Stat. 390) had

little relevance wren the Federal Government set up a rec-

lamation project. /vanhoe was the principal case authority

relied upon by the Court of Appeals in Tulare /. It cited

that case nine times in that opinion. Based upon /vanhoe,

the Court of Appeals assumed that Congress had the power

to interfere with a private individual’s vestcd water right

where it authorized the construction of flood control projects

as in the case of the Flood Control Act of 1944 and held

that Congress had intended to override state law and impose

the 160-acre limitation upon a private individual’s vested

water right if that individual should store his irrigation water

in a flood control reservoir. The Court of Appeals read

section 46 of the Omnibus Adjustment Act of 1944 as ap-

plying to vested water rights.

The Court of Appeals did not make the fundamental dis-

tinction that reclamation law applies only to water owned

by the Federal Government and offered by it for sale to

farmers for irrigation purposes. Based upon its reading of

Ivanhoe, the Court of Appeals blithely assumed that Con-

gress had the same power to impose conditions upon a

privately owned vested water right as it did upon water

a

which was in fact owned by the United States. California

repudiated the dictum in /vanhoe upon which the Court

based Tulare | and in so doing effectively overruled that

decision.

First, the clear thrust of California is that a reclamation

project refers solely to the situation in which the Federal

Government has acquired title to a water right under state

law. ‘‘From the legislative history of the Reclamation Act

of 1902, it is clear that state law was expected to control

in two important respects. First, and of controlling impor-

tance to this case, the Secretary would have to appropriate,

purchase or condemn necessary water rights in strict con-

formity with state law . . .”’ (438 U.S. at p. 665). As a

matter of further fact, it is the Federal Government's own-

ership of that water which it has acquired under state law

which empowers it to impose the 160-acre limitation upon

that water. The Federal Government owned the Friant Dam

on the San Joaquin River, the Friant-Kern Canal which

transported the water to farmers who had never before had

access to that water and the water itself which it offered for

sale to those farmers. it was this fact of ownership which

gave the Federal Government the power to impose the con-

ditions of the 160-acre limitation and appurtenancy upon

the use of that water after it had been sold by the Federal

Government. In /vanhoe this Court said, ‘‘The Federal

Government has the power to impose reasonable conditions

upon the use of federal funds, federal property and federal

privileges’. This Court correctly noted in its California

decision that the so-called ‘‘acreage limitations’ is a mis-

nomer. It is really a limit on the amount of reclamation

water that Federal Government can sell to any one land-

owner.”

a= | 3.

Furthermore, the imposition of the 160-acre limitation

did not interfere with state control of the ‘‘appropriation,

use and distribution of water in irrigation, or any vested

right acquired thereunder’’ in the language of section 8 of

the 1902 Act.

However, a wholly different situation obtains when the

Federal Government claims that it has the power to interfere

with vested water rights simply because that water is stored

in a flood control reservoir. The Federal Government does

not own that water. Therefore, before the Federal Govern-

ment can seek to interfere with those vested rights, two

questions have to be answered: (1) By what authority does

the Federal Government have the power to interfere with

water rights vested under state ‘aw? and (2) does the Act

in question clearly manifest an intention upon the part of

Congress to interfere with vested water rights, assuming

that it has the power to do so?

The question of the source of the power of the Federal

Government to impose the 160-acre limitation in a vested

water right is squarely tendered by the case at bench. In its

Tulare II opinion, the Court of Appeals casi about for some

plausible reason to justify the Federal Government's inter-

ference with a private citizen’s use of his own property and

found it in an alleged subsidy:

**Contrary to appellant’s position the Pine Flat Proj-

ect did involve a federal subsidy to provide this and

other benefits justifying the imposition of reasonable

conditions upon receipt of the benefits’’ (Appendix p.

34).

This statement is contrary to the following finding of fact

of the District Court:

‘The aforementioned payment obligation of $14,-

250,000 was determined by the Secretary of War in

enti

accordance with the procedures of applicable law. Pay-

ment of this amount by the water users under their

contracts will fully reimburse to the United States the

capital cost of the project allocated in accordance with

law to irrigation storage use.’’ (Emphasis supplied)

(Finding No. 7, Appendix p. 4).

It is at once obvious that the statement of the Court of

Appeals that there was a subsidy cannot be reconciled with

the express findings of the District Court that there is no

subsidy. The Court of Appeals has never inentioned in either

Tulare I or Tulare II (1) that the landowners have paid the

United States $14,250,000 for the conservation storage

rights in the Pine Flat Reservoir and (2) that the only credible

factual finding as to the effect of that payment is that no

federal subsidy is involved in this arrangement.

It is, of course, readily apparent why Judge Browning

has made no reference to either of these facts in either Tulare

I or Tulare Il. Since the United States does not own the

water with which this case is concerned, the Court of Ap-

peals’ decision can stand only if there is the premise of a

federal subsidy. The finding of the District Court is that

there is no subsidy. This finding should be controlling,

particularly in view of the fact that neither the government

nor the Court of Appeais has challenged this finding. Never-

theless, for reasons that are not explained on the record, the

Court of Appeals had deliberately chosen not to mention

these facts. This is not a casual oversight. It is a deliberate

debasement of the appellate process by the Court of Appeals.

Not only did the Court of Appeals ignore the findings of

the District Court in its rationalization that the Federal Gov-

ernment had the power to impose the 160-acre limitation

on conservation storage but it also ignored the fact that, in

California, this Court suggested that the Federal Govern-

=

ment does not have the power to interfere with a citizen’s

use of his irrigation water in accordance with state law:

‘*Both sponsors and opponents of the Reclamation

Act also expressed doubts as to Congress’ power to

override the States’ regulation of water within their

borders. Congress was fully aware that the Supreme

Court had ‘in several decisions recognized the right of

the State to regulate and control the use of water with

its borders.’ *’. (California v. United States, supra, at

p. 669).

California also stands for the proposition that, assuming

Congress has the power to overrule state water law, it must

appear ‘‘clearly,’’ “‘specifically’’ and ‘‘explicitly’’ in the

language of the statute itself that Congress intended to re-

place state law before any court should construe a congres-

sional enactment as having that effect. If this requirement

of California is applied to the case at bench, the judgment

of the Court of Appeals should be reversed and the judgment

of the District Court affirmed.

California holds that the court must look to the *‘congres-

sional directive authorizing the project in question’’ to de-

termine if Congress intended to usurp the application of

state law to the particular project. The Pine Flat project was

authorized by the Flood Control Act of 1944 by the follow-

ing language:

‘The project for flood control and other purposes

for the Kings River and Tulare Lake Basin, California

is hereby authorized substantially in accordance with

the plans contained in House Document Numbered 630

. . . Provided further, That the Secretary of War shall

make arrangements for payment to the United States

by the State or other responsible agency, either in lump

sum or on installments, for conservation storage when

used . . .”’ (Emphasis supplied) 58 Stat. 891, 901.

elites

This language is clear and unambiguous. Congress in-

tended that the farmers in the Kings River service area would

have the right to utilize the Pine Flat Reservoir for conser-

vation storage provided the State of California or some other

responsible agency made arrangements to pay the United

States for those rights. If the State was going to pay for the

conservation storage, the Congress must have assumed that

it would operate the reservoir under state law. The fact that

the United States chose to negotiate the payment contract

with the water users rather than the State does not derogate

from the fact that the authorizing statute contemplated an

unconditional sale of the conservation storage rights of the

Pine Flat Reservoir.

In accordance with the Act, tie water users agreed to pay

the United States $14,250,000 for those conservation stor-

age rights. There is nothing in the statute authorizing the

sale of the conservation storage rights which imposes any

restraint upon the use of the reservoir for conservation stor-

age once arrangements for payment had been made.

Furthermore, in construing section 8 of the 1902 Act,

this Court stated in California **. . . it is clear that state law

was expected to control in two important respects . . . sec-

ond, once the waters were released from the Dam, their

distribution to individual landowners would be controlled

by state law’’ (438 U.S. at p. 665).

Under California law, the Canal Company is obligated

to distribute its water to its shareholders in proportion to

their respective share ownerships. Consolidated Peoples

Ditch Company v. Foodhill Ditch Company, (1928) 205

Cal. 54. There is nothing in the language of section 10 of

the 1944 Act authorizing conservation storage in the Pine

Flat Reservoir which manifests any intention on the part of

the Congress that the Canal Company should not follow the

requirements of state law in distributing its water to its

—_~ =

shareholders after that water has been released from con-

servation storage.

Furthermore, section 10 of the 1944 Act expressly adopts

the plan contained in House Document Numbered 630

(Exhibit 4 at the trial in the District Court). That document

noted that ‘water rights in the area involved are complex

and involved”’ (p. 4); that *‘Water of the Kings River is

completely appropriated and is used by controlling interests

in accordance with a well-established agreement adminis-

tered by a water master’’ (p. 7); and that Pine Flat Dam

‘should be operated in such a manner as not to disturb

existing agreements as to water use.”’ (p. 10).

Section 10 is the controlling statute. There is nothing in

the language of that Act which suggests in any way that the

Canal Company should not distribute its water to its share-

holders in accordance with California law when that water

is released from conservation storage in the Pine Flat Res-

ervoir. This Court noted in California that, in the 1944 Act,

Congress recognized the primacy of state water in the use

and distribution of water (438 U.S. at 678).

The problem with Tulare / and Tulare II is that the Court

of Appeals was unable to grasp the premise that reclamation

law applies only to water owned by the United States. If

it had read section 8 of the 1944 Act as applying only to

water which the United States might acquire for reclamation

purposes in accordance with state law, all would be well

in the realm. The litigants would praise the judicial system.

The Federal Government would not be charged with in-

truding into a farmer’s use of his irrigation water and most

important of all, Tulare I and Tulare I] would be consistent

with California.

B. Tulare II ts Contrary to Bryant v. Yellen, Supra.

Bryant tendered the question of whether the Boulder Can-

yon Project Act (45 Stat. 1057) had the effect of imposing

acreage limitations upon the lands serviced by the Imperial

Irrigation District as to which the landowners held a vested

water right prior to the construction of the project. The

Boulder Canyon Project was authorized as a reclamation

project, but section 6 of that Act provided that one of the

purposes of that Act was the ‘‘satisfaction of present per-

fected rights’’. Notwithstanding that language, the Court

of Appeals had held that the 160-acre limitation applied to

the lands in the Imperial Valley. In order to reach this result,

the Court of Appeals dreamed up a bizarre theory of Cal-

ifornia water law to the effect that the Imperial Irrigation

District owned the water rights in an abstract sense in trust

for all of the lands within the District and not for the benefit

of any particular landowner, and therefore, reversed the

District Court and held that the 160-acre limitation applied

to the lands in the District. The Court of Appeals further

held that the landowners did not have the right to rely upon

the opinion «~ressed by Secretary of the Interior, Ray

Lyman Wilbur, in his letter of February 24, 1933, to a

lawyer for the District that the 160-acre limitation did not

apply to lands as to which a vested water right existed prior

to the enactment of the authorizing statute.

This Court reversed the Court of Appeals and held that

the language ‘‘satisfaction of present perfected rights’’ ex-

pressed the intention of the Congress that the 160-acre lim-

itation should not apply to any water rights which were

vested under state law at the time the Act was passed.

atin

In Bryant, the controlling language was ‘‘satisfaction of

present perfected rights.’’ Section 8 of the Flood Control

Act of 1944 reads, in part, as follows:

**‘Dams and reservoirs operated under the direction of

the Secretary of War may be utilized hereafter for ir-

rigation purposes only in conformity with the provi-

sions of this section, but the foregoing requirement

shall not prejudice lawful uses now existing.’’ (Em-

phasis supplied).

It is the position of the Canal Company that, like the

comparable language in section 6 of the Boulder Canyon

Project Act, the italicized portion of the foregoing quotation

was intended to exclude vested water rights from any burden

which might otherwise have been imposed upon a water

user by virtue of section 8 of the 1944 Act.

The Court of Appeals refused to draw the analogy, stating

instead that ‘‘the italicized language refers to uses to which

projects operated by the Secretary of War were being put

at the effective date of the 1944 Act. It refers neither to

private water rights nor to projects, like Pine Flat, that were

not in existence when the 1944 Act was passed”’ (Appendix

p. 31). However, this statement is erroneous for two reasons:

(1) all of the water rights in the Kings River were vested

in the 28 diverting entities when the 1944 Act was passed;

(2) This interpretation of the Court of Appeals renders mean-

ingless the next clause of section 8 of the 1944 Act which

reads as follows:

**Provided, that this section shall not apply to any dam

or reservoir heretofore constructed in whole or in part

by the Army engineers, which provides conservation

storage of water for irrigation purposes”’ (58 Stat. 891).

The foregoing quotation is an unequivocal statement by

the Congress that section 8 of the 1944 Act does not apply

to any flood control project as to which construction had

ain

commenced before 1944. Therefore, the language *‘the fore-

going requirement shall not prejudice lawful uses now ex-

isting’’ surely must stand for something else, since every

word in a legislative enactment is presumed to have some

meaning of its own.

This Court’s decision in Bryant compels the conclusion

that vested water rights are not subject to acreage limitations

in the case at bench. A horizontal comparison of the relevant

language of the two statutes best illustrates this point.

Section 6 of the Boulder Section 8 of the 1944

Canyon Act Flood Control Act

**satisfaction of present **the foregoing requirement

perfected rights’’ shall not prejudice lawful

uses now existing”’

These two quotations are different in form but not in

substance. There is no difference in ‘‘satisfying vested

rights’’ from ‘‘not prejudicing lawful uses now existing’’.

Each of these sentences means that vested rights were not

to be affected by the project in question. The decision of

the Court of Appeals is contrary to this Court’s decision in

Bryant.

Tulare II is also inconsistent with Bryant in its treatment

of the contemporanous construction of the Act by the of-

ficials charged with enforcing. In Bryant, Secretary of the

Interior Ray Lyman Wilbur wrote a letter dated February

24, 1933 to the Imperial Irrigation District in which he

expressed the viewpoint that the 160-acre limitation would

not apply to lands which had a vested water right at the time

of the passage of the Boulder Canyon Project Act. The

Court observed that the Imperial Irrigation District negoti-

ated its contract with the United States based upon the

opinion stated in the Secretary's letter, which was not of-

ficially repudiated by the Secretary of the Interior until 1964.

<liats

An identical situation obtains in the case at bench con-

cerning the contemporaneous construction of reclamation

law by the responsible officials charged with enforcing the

Act to the effect that once one entity such as the Canal

Company has paid its share of the construction costs of a

project, it shall take its irrigation water free of the 160-acre

limitation. However, the Court of Appeals preferred once

again to ignore the findings of the trial court. It said: ‘*Fur-

thermore, unlike the situation in Bryant, neither the legis-

lative history nor contemporaneous administrative interpre-

tation of the statute authorizing the Pine Flat Project (the

Flood Control Act of 1944) supports an exemption of the

project from the 160-acre limitation (Appendix pp. 31-32).

This statement of the Court of Appeals is demonstrably

false. The District Court found, *‘The practice of extin-

guishing acreage limitation upon final payment by a con-

tracting entity, whether in lump sum at the beginning of a

contract period, or whenever it might occur (often referred

to as the ‘pay-out principle’), was according to the extensive

evidence presented to this Court, the uniform practice of

the Bureau of Reclamation and the Department of the In-

terior for 50 years’’ (Finding 16, Appendix p. 11). The

District Court made extensive and detailed findings on the

administrative practice of the Bureau of Reclamation on the

payout question, which included the opinions of four Sol-

icitors of the Department of Interior, the official statements

by three successive Secretaries of the Interior and an official

two volume study of the Department of Interior which was

submitted to the Chairman of the Public Works and Re-

sources Sub-Committee of the Committee on Government

Operations, House of Representatives in 1956. (Findings

Nos. 14-23, Appendix pp. 9-17).

Why the Court of Appeals would make the statement

which it did concerning the administrative practice of the

— Ss

Department of Interior in view of the record is just another

one of the mysteries of the judicial orocess. Tulare I] cannot

be reconciled with Bryant, on the issue of contemporaneous

construction and administrative practice.

Il.

CONSTITUTIONAL ISSUES.

A. Were the Petitioners Denied Due Process of Law

by Virtue of the Fact That the Court of Appeals

Refused to Pass Upon the Validity of the Petitioners’

Estoppel Defense Which They Had Established in

the District Court?

One of the basic rights of a litigant in our judicial system

is that, if he establishes a valid defense to a plaintiff's

complaint, he is entitled to the protection of that defense

forever more. The petitioners established the defense of

estoppel in the District Court. The findings of fact of the

District Court on this defense include the following:

**24. As the evidence establishes, the Kings River

water users relied upon numerous and repeated assur-

ances made to them by the Bureau of Reclamation and

the Department of the Interior that, even though

acreage limitation initially applied to the irrigation use

of water stored in Pine Flat Dam. such acreage limi-

tation would no longer apply to any Kings River con-

tracting entity after it made final payment of capita

charges, such as was done by the defendant in this

case. If pay-out has not the effect of extinguishing

acreage limitation, the position of the Kings River

water users and this defendant would be most seriously

prejudiced. The Kings River water users, including the

defendant herein, have expended millions of dollars

and untold numbers of hours in reliance upon the Bu-

reau’s representations that pay-out would terminate

acreage limitations under applicable law. . . .

ane:

**26. To permit the Government to reverse its po-

sition as to the effect of pay-out would mean that the

Kings River water users paid out millions of dollars

in reliance to their detriment upon a legal interpretation

repeatedly reaffirmed to them by the Government and

commended to them by long-standing interpretation

and application of the law over the course of at least

50 years. The Court is not aware of a clearer case of

substantial reliance by citizens upon the Government’s

contemporaneous and long-standing administrative

interpretation and application of federal law, which is

fully supported by the statutes enacted by Congress.”’

(Appendix pp. 17-19).

The validity of this defense has never been denied by the

Court of Appeals. It simply ignored it. No one reading

Tulare I or Tulare II for that matter — would have any idea

that the defense of estoppel had ever been advanced let

alone established by the petitioners in the District Court.

This tyranny of silence amounts to a denial of due process

to the petitioners of constitutional stature.

The situation in the case at bench is no different than if

the Court of Appeals had ordered the petitioners not to brief

the validity of their estoppel defense and had refused to hear

any argument on that issue. The Court would instantly brand

judicial conduct of that stripe as a denial to the petitioners

of their basic constitutional right to due process of law.

The hearing granted the petitioners by the Court of Ap-

peals on their defense of estoppel is no different than they

would have received had they mailed their briefs to Fidel

Castro and argued their case in an empty room.

This Court should not permit the Court of Appeals to

deny the petitioners their right to due process of law in such

a blatant fashion.

iin

B. It Is Unconstitutional for the United States to En-

force Acreage Limitations on Conservation Storage

in Flood Control Reservoirs West of the 100°

Meridian but Not East Thereof.

The United States stipulated in the District Court that

reclamation law applies only west of the 100° meridian, and

therefore, it intended to enforce the 160-acre limitation on

conservation storage only on flood control reservoirs located

west of the 100° meridian but not on conservation storage

in any flood control district east of the 100° meridian. The

effect of this stipulation is that a farmer, who stores water

as to which he has a vested right in a flood control reservoir

located east of the 100° meridian, may have the unlimited

use of that reservoir for conservation storage free of the

160-acre limitation but that any farmer who seeks to store

his privately owned water in a flood control reservoir located

west of the 100° meridian will be subject to the 160-acre

limitation.

This is an invidious discrimination. The situation is no

different than if the federal government should attempt to

levy an income tax on farmers living west of the 100° me-

ridian but not on farmers living east of the imaginary bound-

ary.

The government entered into this stipulation in recogni-

tion of the fact that the Congress has authorized the con-

struction of reclamation projects only west of the 100° me-

ridian and in further recognition of the fact that reclamation

law applies only to reclamation projects. If the government

would take the next step and concede that reclamation law

applies only to water owned by the United States because

that is what reclamation projects and reclamation law are

=

all about, there would be no problem.* However, the dif-

ficulty, and it is one of constitutional dimensions, arises

when the government seeks to impose the burden of the

160-acre limitation upon conservation storage in a flood

control reservoir and then applies that burden only to flood

control projects west of the 100° meridian because that is

where the reclamation projects are located.

Only Alice in Wonderland could understand this reason-

ing. Section 8 of the Flood Control Act of 1944 applies to

*‘any dam and reservoir operated for flood control purposes

by the Secretary of war, etc.’’ There is no geographical

limitation in that language, particularly in view of the fact

that the 1944 Act authorized over 90 flood control projects

in all parts of the United States.

That a flood control reservoir in California may be closer

to a reclamation project than is a flood control project in

Georgia is no reason to impose the 160-acre limitation upon

the flood control project in California but not on the one

in Georgia. Nevertheless, the Court of Appeals upheld the

validity of this classification by stating:

‘*The reclamation statutes are a national legislative

response to climatic differences between the western

region and the remainder of the nation. Provisions for

acreage limitation are a reasonable means of furthering

the public’s purposes underlying these statutes. /van-

hoe, 358 U.S. at 297, Tulare I. 035 F.2d at 1119-20.”"

(Appendix p. 34).

The Court does not identify the *‘public purposes’” which

the federal reclamation statutes sought to achieve, nor does

it set forth any facts which justify imposing the burden of

the 160-acre limitation upon some but not all farmers who

are similarly situated. °

“This is, of course, the teaching of California, supra.

If it is constitutional for the Federal Government to apply

reclamation /aw including the 160-acre limitation upon con-

servation storage in one flood control reservoir, that burden

should apply to all flood control reservoirs in the United

States and not just flood control reservoirs located in the

west. The fact that this far Congress has authorized the

construction of reclamation projects only west of the 100°

meridian is no reason for a geographical limitation upon the

application of reclamation /aw if, indeed, reclamation law

can ever apply to privately owned water.

The Flood Control Act of 1944 is a statute of general

application to all parts of the United States. It is unconsti-

tutional to limit the application of the conditions of that

Statute to only the western part of the continental United

States.

C. It Is Unconstitutional for the Federal Government

to Pursue a Policy of Land Reform in the West

Through the Agency of the 160-Acre Limitation.

In Tulare II, the Court of Appeals referred only vaguely

to “‘the public purposes’’ which are sought to be achieved

by applying the 160-acre limitation to privately owned

water. However, the Court was much more specific as to

these purposes in Tulare I where the Court said:

**Section 46 was intended to accomplish the redis-

tribution of large privately owned tracts at prices sub-

stantially below the actual value of such lands at the

time of the sale,”’ 535 F. 2d at p. 1121.

Land reform is not a legitimate objective for the exercise

of federal power. In Kansas v. Colorado, 206 U.S. 461

(1907), this Court held that the states have full jurisdiction

over the lands within its borders. Furthermore, every citizen

has a right to own as much land as he desires. The Federal

Government has no legitimate concern with the pattern of

~~ =

land ownership in any state. Therefore, the Federal Gov-

ernment may not execute any of its legitimate powers to

endeavor to effect a policy of land reform anywhere in the

United States. Any attempt by whatever federal bureaucracy

may hold the reins of power at any particular time to coerce

the breakup of what that particular bureaucracy might regard

as excessively large land holdings is unconstitutional.

McCullough v. Maryland, 4 Wheat. 316, 4 L. Ed.

579 (1819);

United States v. Butler, 297 U.S. 1 (1937).

Congress did not enact the acreage limitation provisions

of reclamation law in order to force the breakup of large

landholdings. As originally conceived, the purpose of a

reclamation project was to open up public lands for settle-

ment. The 160-acre limitation was intended to limit the

amount of federally owned land and federally owned water

that the Federal Government would sell to any one settler,

in order that a maximum number of citizens might be able

to purchase public land and public water from the United

States. The same reasoning applies to a reclamation project

in which the Federal Government offers to sell only recla-

mation water instead of both land and water. The purpose

of limiting the amount of water which any single landowner

may purchase from the Federal Government is to make it

possible for a maximum number of farmers to buy recla-

mation water from the government.

The 160-acre limitation was not intended by the Congress

to be an agency of land reform in the west. The foregoing

statement by the Court of Appeals suggests that the Court

has been infiltrated by zealots who do not hesitate to use

the enormous power of appellate review to expand the reach

of the federal bureaucracy into the lives and property of the

farmers in the western region of the United States in order

= 98

to achieve what they perceive to be socially desirable goals,

hardly a proper judicial function.

None of the powers granted the Federal Government au-

thorize it to embark upon a program of land reform. The

only legitimate interest which the Federal Government has

concerning conservation storage in the Pine Flat Reservoir

or any other flood control reservoir is whether the Federal

Government has been paid a reasonable sum for the use of

the reservoir for that purpose. That goal was accomplished

when the water users in the Kings River service area paid

the United States $14,250,000 for the perpetual and exclu-

sive use of the Pine Flat Dam for irrigation purposes. The

scope of federal power does not extend beyond achieving

payment.

Conclusion.

The Court should issue a writ of certiorari in this matter

because of the fact that Tulare / is contrary to California

and Bryant. Furthermore, section 8 of the 1944 Act does

not authorize the broad extension of federal power to in-

terfere with private vested water rights that is implicit in the

decision of the Court of Appeals. Even if it did, such a

result would be unconstitutional.

Respectfully submitted,

ROBERT M. NEWELL,

Attorney for Petitioners.