Amicus Curiae Brief — Orff v. United States

{ Supreme Court, US.

FILED

NOV 2 4 2004

- \ OFFICE OF THE CLERK

No. 03-1566

In the

Supreme Court of

the United States

FRANCIS A. ORFF, ET AL.,

Petitioners,

Vv.

UNITED STATES OF AMERICA, ET AL.,

Respondent.

On Writ of Certiorari to

the United States Court of Appeals for the Ninth Circuit

BRIEF AMICI CURIAE OF CENTRAL SAN

JOAQUIN WATER CONSERVATION DISTRICT*

IN SUPPORT OF PETITIONER

Nancie G. Marzulla**

Roger J. Marzulla

MARZULLA & MARZULLA

1350 Connecticut Ave., NW

Suite 410

Washington, DC 20036

(202) 822-6760

[*Amici listing continued on next page]

**Counsel of Record for Amici Curiae

{Continued from Cover]

BRIEF AMICI CURIAE OF

ENTERPRISE IRRIGATION DISTRICT,

KLAMATH BASIN IMPROVEMENT DISTRICT,

KLAMATH DRAINAGE DISTRICT,

KLAMATH HILLS DISTRICT IMPROVEMENT

COMPANY,

KLAMATH IRRIGATION DISTRICT,

MALIN IRRIGATION DISTRICT,

MIDLAND DISTRICT IMPROVEMENT COMPANY,

PINE GROVE IRRIGATION DISTRICT,

POE VALLEY IMPROVEMENT DISTRICT,

SHASTA VIEW IRRIGATION DISTRICT,

STOCKTON EAST WATER DISTRICT,

SUNNYSIDE IRRIGATION DISTRICT,

TULELAKE IRRIGATION DISTRICT, AND

WESTSIDE IMPROVEMENT DISTRICT

QUESTION PRESENTED

Amici curiae will address the following question:

Are farmers intended third-party beneficiaries of their

irrigation district’s water service and repayment contracts

with the U.S. Bureau of Reclamation and, therefore,

entitled to sue Reclamation for breach thereof, as the

Federal Circuit has long held?

iil

TABLE OF CONTENTS

Page

US TRIN FRING eccsccccccccccsccsccsscocssosssesess ili

FAR Ge RAFT CUE hcccsessccccccsssenssscnscnesesies vi

INTEREST OF AMICT CURIAE. .....cccccscccccsccscscescees l

SUMMARY OF ARGUMENT. ......ccccsccscsccccccccccsensss 3

REIT, endisesnnscccithithiidiapioaianiameniaiia 7

I. The Structure of the Reclamation Act and the

Historical Context in Which the Contracts Were

Entered Into, Support the Federal Circuit’s

Conclusion That the Water Supply Contracts

Between the Bureau of Reclamation and

Irrigation Districts Were Intended To Benefit

the End Water Users...

II. Unlike Water Users Under Typical Utility

Contracts, the Waiter Users Under Reclamation

Act Contracts Hold a Property Right To

Receive Project Water

III. As Beneficial Owner of the Water Right and

Beneficial User of the

Water, the Irrigator

Must Be Provided a Legal Process To

Vindicate This Right..

iV

CONCLUSION

TABLE OF AUTHORITIES

Page

Cases:

Barcellos & Wolfsen v. Westlands Water District,

a 8 I ee 4-5

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

SP Te tictippiishtesnbshintipehdediiahdeinbunnieieihpiakauniabthaeteteieni 7-8, 9, 19, 25

City of Monterey v. Del Monte Dunes at Monterey,

Bg Fe I CDi civcecncicnstdsecoiescccsenssenccseses 23

Coachella Valley County Water District v. Stevens,

Bes IS Bi Rinccccdsnsoescanvocesianesonensesaenereus 13

Eddy v. Simpson, 3 Cal. 249 (1853)...........ceceecececeecens 24

First English Evangelical Lutheran Church of

Glendale v. County of Los Angeles, 482 U.S. 304

Sere ivivcheiacsaseisiiiiitesieisnsigtbeepinphchcnieiibtietiiaietbiaeasaettieaten ta! 23

Fox v. Ickes, 137 F.2d 30 el 8 ee 26

Fullerton v. State Water Resources Control Board,

90 Cal. App. 3d 590 (1979)...........ccccceceececcecece sues 23-24

Henderson County Drainage Dist. No. 3 v.

United States, 53 Fed. Cl. 48 (2002) ...........cccccececeeceees 4

H.F. Allen Orchards v. United States, 4 Cl. Ct. 601

ST iesniceinslisiesincieiicilesbininntaryibtcidasinientiebiaibin ct caaal 3

H.-F. Allen Orchards v. United States, 749 F.2d 1571

(Ped, Cie. 1966)... .ccccccsccsccccccsccccscvccsscocssesces 3-4, 6, 14

Ickes v. Fox, 300 U.S. 82 (1937)........2+-+40 6, 15-16, 25-26

Jacobs v. United States, 290 U.S. 13 (1933)..........eeeeees 20

Kentucky Resources Council, Inc. v. Office of Surface

Mining, 155 IBLA 354 (2001)............ceeeeeeeneeeeee ee cees 19

Klamath Irrigation Dist. v. United States, No. 01-591L

(Dat. 11, DEBE). ccccscccccccccscccscccccccccccscccsescescososescon 2

Klamath Water Users Ass'n v. Patterson, 15 F. Supp.2d

990 (D. Ore. 1998)..........cscecscccccccccrccecccccccscsosceens 15

Klamath Water Users Ass'n v. Patterson, 204 F.3d 1206

(Dths Cie. 1999)... scccccsccccsescsccccccccscoscscccesecesossosose 15

Nebraska v. Wyoming, 325 U.S. 589 (1945).........++++ 6,17

Nevada v. United States, 463 U.S. 110

GP ccdisiicctssvcsccoseccussscesescnsseced 6, 8-9, 18-19, 20, 29

Orff v. United States, 358 F.3d 1137

(Sth Cir. 2004).........sccccccccccccccccccrecsccesescreceneesees 3,4

Peterson v. United States Dep't of Interior, 899 F.2d 799

(Dis Cle. 19BG)... .ccccescccsccscscccscccccccsccscceseces 9-10, 11-12

Rancho Santa Margarita v. Vail, 81 P.2d 533, 11

Cal.2d 501 (1938).........ccscccccccccccccccccccccscscsscsossscees 24

Stockton East Water Dist. v. United States, No. 04-541L

ae TD athcptiinnsinenesihicniiibiidnliaiddaaniaiinietddie: 2

Sumner Peck Ranch, Inc. v. Bureau of Reclamation,

oe 8 Re FE re nenTe 5

Constitutions:

Fh + EN OT Um SE 20

Statutes:

Act of May 15, 1922, 42 Stat. 541 (1922).......ccccssseeeeesee1 0

Act of July 10, 1952, 66 Stat. 560 (1952)..............0.eee 21

Omnibus Adjustment Act of May 25, 1926,

ee PE sich iicsiteniicumninitiingunienabshalaiens 10-11

Reclamation Act of 1902, 32 Stat. 388 (1902)............ 7, 25

Cal. Water Code § 102 (2004)..............ccccsceccccececeeee 23

Cal. Water Code § 1201...... uininadieeninidinnniiécedeibamandl 24

ee Ne We iciilinedaddbdnsitiitiindeeiadaticencd 24

hg RARER ERENCE ee PER eee E MRS eee PAL 24

i ii i a a a 24

Se Ce II OE Bi iciisicsisissscdusnnosadecnedicieubuccmns 12

Vili

Cal. Water Code § 31150.............csceceeeeereeeeeeeeeeeees 12

Cal. Water Code § 35875............ccscecccecceccesceseeeceees 12

Cal. Water Code § 44000.............cccceeeeeeeeeeee een ens 12-13

Cal. Water Code § 50970.............ccceeeeeeereeeeeeeeeeeeees 13

Cal. Water Code § 74610...........ccceececereeeeeee eee eneenees 13

Or. REV. STAT. § 545.511 (2004)..........:eceeeeee eee eeeeeee 13

OR. REV. STAT. § 547.355.........ccecceceeeetereeeeeeeeeeeeens 13

OR. REV. STAT. § 552.350..........sssceececeererereececeeoenns 13

OR. REV. STAT. § 553.710............scsccccecceeecereseeceeees 13

OR. REV. STAT. § 554.260..........0cscececeeceeeeeeneeeeneeees 13

Rules:

B. Cd, Rabe SPB. cccccscccccccsscsccsccccscvcscssesessescvesseceess |

B. Cd. Ratha SPB ..ccccccccsccccsccccccscsccsesccsccnccvcccscsscsoes ]

Other Authorities:

A Bill to Authorize Suits Against the United States

to Adjudicate and Administer Water Rights Be >re

a Subcommittee of the Committee on the Judiciary

of the United States Senate, 82nd Cong. (Apr. 25,

ix

Aug. 3 and 8, 1951) (statement of William H.

Veeder, Special Assistant to Attorney General,

DOJ)

Reed D. Benson, Whose Water Is It? Private Rights

and Public Authority Over Reclamation Project Water,

16 VA. ENVTL. L.J. 363, 387-88 (1997)........ccceceeee. 10-11

Bureau of Reclamation, About Us,

http://www.usbr.gov/main/about/ (last visited

IU I IO ihiecsiescciiemsiusinciiine bes ike 2-3

Department of Interior, Departmental Manual, 209 DM

3.2, Authority in Specified Matters, available at

http://elips.doi.gov/elips/release/3537.htm (last visited

dg RGR Seen nen MRED mE 19

Filings of Claims for Water Rights in General Stream

Adjudication, Op. Solicitor, Dep’t of Interior, 97

Interior Dec. 21, 1989 WL 506913 at *1 (July 6,

Se natiapainaiitnnentonsdninsisdbiniaensibanceaiats 19, 20-21, 27-29

Arthur L. Littleworth & Eric L. Garner, California

UT PUI stiches ii al 24

Frank J. Trelease, Reclamation Water Rights, 32

Rocky Mtn. L. Rev. 464, 465 (1960)...........ccccccceceeceeee 9

Amici curiae submit this brief supporting petitioners;

all parties have consented to its filing. See S. Ct. Rule 37.3.

INTERESTS OF AMICI CURIAE

Amici curiae consist of fifteen water-management

districts (Districts) in Oregon and California that receive

water stored by the Bureau of Reclamation in its Klamath

and Central Valley Projects. Amici curiae are the: Central

San Joaquin Water Conservation District; Enterprise

Irrigation District; Klamath Basin Improvement District;

Klamath Drainage District; Klamath Hills District

Improvement Company; Klamath Irrigation District; Malin

Irrigation District; Midland District Improvement Company;

Pine Grove Irrigation District; Poe Valley Improvement

District; Shasta View Irrigation District; Stockton East Water

District; Sunnyside Irrigation District; Tulelake Irrigation

District; and Westside Improvement District.

All of these Districts, amici curiae, contract with the

Bureau of Reclamation (Reclamation) for delivery of project

water to the end users—farmers on tens of thousands of acres

of high-value agricultural land; the farmers all possess a

property right to receive the water from the Reclamation

' No counsel for any party to the case authored this brief amici curiae,

either in whole or in part. Furthermore, no persons other than amici

curiae contributed financially to the preparation of this brief. See S. C:.

Rule 37.6.

projects. All of these Districts presently have suits pending

against the United States under the Tucker Act in the U.S.

Court of Federal Claims, seeking monetary damages for

breach of their water service contracts or for payment of just

compensation, in a representative capacity on behalf of their

water users. Reclamation’s failure to deliver this water to the

Districts has caused the Districts to seek monetary damages

in the U.S. Court of Federal Claims under the Tucker Act for

breach of the water deliver contracts or for the

unconstitutional taking of their water rights. See Klamath

Irrigation Dist. v. United States, No. 01-591L (Oct. 11,

2001); Stockton East Water Dist. v. United States, No. 04-

541L (April 20, 2004).

How this Court defines intended third-party

beneficiary status could have a profound effect on the rights

and obligations of all Reclamation Act project contract

holders, including amici curiae. Reclamation has constructed

more than 600 dams and reservoirs in 17 Western states. Of

these, Reclamation administers 348 reservoirs with a total

storage capacity of 245 million acre-feet, providing one out

of five Western farmers (140,000) with irrigation water for

10 million acres of farmland (on which they produce 60

percent of the nation’s vegetables and 25 percent of its fruit

and nuts). See Bureau of Reclamation, About Us,

http://www.usbr.gov/main/about/ (last visited November 22,

2004).

SUMMARY OF THE ARGUMENT

At issue in this case is whether water users, who

receive water from a U.S. Bureau of Reclamation

(Reclamation) water project pursuant to a contract between

Reclamation and an irrigation district, are the intended

beneficiaries of that contract and therefore, entitled to sue for

breach of contract damages under it. This case asks the

Court to pick between decisions of two Circuit Courts of

Appeal, reversing a Ninth Circuit Court of Appeals decision,

Orff v. United States, 358 F.3d 1137 (9th Cir. 2004), and

adopting the Federal Circuit’s analysis set forth in H.F. Allen

Orchards v. United States, 749 F.2d 1571 (Fed. Cir. 1984).

In H.F. Allen Orchards, the Federal Circuit

concluded that the water users were the intended third-party

beneficiaries of the contracts between Reclamation and the

water district. The trial court had dismissed a suit brought by

160 water users as third-party beneficiaries of irrigation

districts’ contracts with Reclamation on two grounds: (1)

lack of third-party beneficiary status; and (2) lack of merits.

See H.F. Allen Orchards v. United States, 4 Cl. Ct. 601

(1984). The Federal Circuit reversed on the first holding, but

affirmed on the second:

The irrigation districts, which contracted

with the Bureau, act as a surrogate for the

aggregation of farmers. They use no water

themselves. The farmers ultimately pay for

all the services which the government

supplies. It is clear that the appellants,

owners of the property at issue, the water,

also are intended third-party beneficiaries of

the 1945 Consent Decree. Under the rules of

the Claims Court “every action shall be

prosecuted in the name of the real party in

interest.” Here the farmers, owners of the

water and beneficiaries of the irrigation

projects, are the true parties in interest.

Id. at 1572-73, 1576; see also Henderson County Drainage

Dist. No. 3 v. United States, 53 Fed. Cl. 48 (2002) (holding

that individual farmers were third-party beneficiaries to a

contract entered into between their drainage districts and the

United States).

The minority view, represented by the Ninth Circuit’s

decision in Orff v. United States, 358 F.3d 1137 (9th Cir.

2004), reached a different conclusion, holding that the water

users were not the intended third-party beneficiaries of the

contract between Reclamation and the water district. Jd. Not

only is the Orff decision at odds with decisions from the

Federal Circuit, it is at odds with other Ninth Circuit cases

involving the same contract and same farmers. Compare Orff

v. United States, 358 F.3d 1137 (9th Cir. 2004) with

Barcellos & Wolfsen v. Westlands Water District, 899 F.2d

~-

814, 816 (9th Cir. 1990) (holding water users were third-

party beneficiaries under irrigation districts’ contracts with

Reclamation); Sumner Peck Ranch, Inc. v. Bureau of

Reclamation, 823 F. Supp. 715, 731-33 (E.D. Cal. 1993)

(recognizing plaintiffs landowners as third-party

beneficiaries to the 1963 and 1965 contracts between the

United States and Westlands).

As the Federal Circuit correctly concluded in H.F.

Allen Orchards, the historical context of these water delivery

contracts and the statutory structure of the Reclamation Act

force an inexorable conclusion that the end water users are

the intended third-party beneficiaries of these water delivery

contracts. Any other result would be untenable because the

subject matter of the contract, the right to receive the water,

is held by the water user. Indeed, as the U.S. Department of

Interior has repeatedly observed, under state law, neither the

water district nor Reclamation can own the water right

because they do not put the water to beneficial use; rather,

the water right resides in the water user, who most typically

is a farmer who puts the water to beneficial use by irrigating

his farm crops.

The ability of water users to seek damages for the

government's refusal to deliver their water to them under the

contract is crucial because in recent years, Reclamation has

adopted policies that favor use of the water for environmental

objectives (such as protecting endangered fish) over the

contractually intended delivery of the water to farmers for

agricultural use. As a result, increasingly, Reclamation

chooses to dramatically reduce or not deliver any water at all

to the water districts, leaving the water users, farmers, with

no water with which to grow their crops. Yet, it is the farmers

themselves, and not the water districts, that ultimately suffer

when the government breaches the water delivery contracts.

Amici curiae urge this Court to adopt the rule of law

set forth by the Federal Circuit, recognizing that landowners

do have the right to sue as third-party beneficiaries of

irrigation contracts. H.F. Allen Orchards v. United States,

749 F.2d 1571, 1576 (Fed. Cir. 1984). The Federal Circuit

observed that irrigation districts act as a “surrogate for the

aggregation of farmers” and that their constituents are the

true parties in interest in this type of litigation. Jd. In

upholding the right of the water user to sue individually, the

Federal Circuit followed established precedent of this Court

and reclamation jurisprudence. See, e.g., Ickes v. Fox, 300

U.S. 82 (1937); Nebraska v. Wyoming, 325 U.S. 589 ( 1945);

Nevada v. United States, 463 U.S. 110 (1983). Accordingly,

the Ninth Circuit’s deviation from traditional notions of

water (property) rights and reclamation law should be

reversed.

ARGUMENT

1. The Structure of the Reclamation Act and the

Historical Context in Which the Contracts Were

Entered Into, Support the Federal Circuit’s

Conclusion That the Water Supply Contracts

Between the Bureau of Reclamation and Irrigation

Districts Were Intended To Benefit the End Water

Users.

The contract under scrutiny in this case is a highly

specialized agreement, the terms of which are largely

dictated by the federal Reclamation Act of 1902. The two

entities that entered into the contract, the Bureau of

Reclamation and the Westlands Water District, owe their

existence to the reclamation laws passed by Congress and 17

Western states. These water delivery and repayment

contracts, including the one at issue in this case, can be

understood only in the historical and legislative framework in

which they were forged.

On the numerous occasions on which this Court has

been called upon to interpret the provisions of the

Reclamation Act of 1902, 32 Stat. 388 (1902), the Court has

repeatedly noted the role that statute played in transforming

the arid Wes: from desert into a vast region of fruitful family

farms:

In order to correctly ascertain the meaning

of the Reclamation Act of 1902, we must

recognize the obvious truth that the history

of irrigation and reclamation before that date

was much fresher in the minds of those then

in Congress than it is to us today. “[{The]

afternoon of July 23, 1847, was the true date

of the beginning of modern irrigation. It was

on that afternoon that the first band of

Mormon pioneers built a small dam across

City Creek near the present site of the

Mormon Temple and diverted sufficient

water t> saturate some 5 acres of

exceeding! dry land. Before the day was

over they had planted potatoes to preserve

the seed.” During the subsequent half

century, irrigation expanded throughout the

arid States of the West, supported usually by

private enterprise or the local community.

By the turn of the century, however, most of

the land which could be profitably irrigated

by such small-scale projects had been put to

use. Pressure mounted on the Federal

Government to provide the funding for the

massive projects that would be needed to

complete the reclamation, culminating in the

Reclamation Act of 1902.

California v. United States, 438 U.S. 645, 648-49 (1978)

(citations omitted).

[With the passage of the Reclamation Act

of 1902, the Federal Government was

designated to play a more prominent role in

the development of the West. That Act

directed the Secretary of the Interior to

withdraw from public entry arid lands in

specified western States, reclaim the lands

through irrigation projects, and then to

restore the lands to entry pursuant to the

homestead laws and certain conditions

imposed by the Acct itself.

Nevada v. United States, 463 U.S. 110, 115 (1983) (citation

omitted).

In enacting the Reclamation Act, “Congress set forth

on a massive program to construct and operate dams,

reservoirs, and canals for the reclamation of the arid lands in

17 Western states.” California, 438 U.S. at 650. A

“revolving fund was established with moneys received from

the sale of public lands, and the Secretary of Interior was

directed to survey the west and locate and construct irrigation

projects, opening up the improved lands to settlement under

the homestead laws .. . . Construction costs were to be repaid

into the fund by the settlers and landowners in ten annual

installments without interest.” Frank J. Trelease, Reclamation

Water Rights, 32 Rocky Mtn. L. Rev. 464, 465 (1960).

Indeed, as the Ninth Circuit stated,

The Congress that enacted the Reclamation

Act of 1902, however, had far greater

expectations for the program than simply an

increase in the West’s agricultural

production. With the Reclamation Act,

Congress created a blueprint for the orderly

development of the West, and water was the

instrument by which that plan would be

carried out.

Peterson v. United States Dep't of Interior, 899 F.2d 799,

802 (9th Cir. 1990).

Under the Reclamation Act, as originally conceived,

the Bureau of Reclamation dealt directly with the farmers,

delivering water to them and collecting repayments of the

required that all future contracts be made

only with irrigation districts. Thus, users

now receive reclamation project water

through an intermediary, which may be an

irrigation district, a conservancy district, a

water user’s association, or some other form

of organization.

» es , q

cost of constructing the project facilities. The parties soon Reed D. Benson, Whose Water Is It? Private Rights an

Public Authority Over Reclamation Project Water, 16 VA.

ENVTL. L.J. 363, 387-88 (1997).

realized, however, the significant benefits of organizing a

“water users association,” the forerunner of the modern water

district.?

Congress then authorized Reclamation to contract

with districts rather than individual users, and, in the

Omnibus Adjustment Act of 1926,°

* The Act of May 15, 1922, provides in pertinent part:

That in carrying out the purposes of the Act of June 17,

1902 . . ., and Acts amendatory thereof and

supplementary thereto, and known as and called the

reclamation law, the Secretary of the Interior may enter

into contract with any legally organized irrigation

district whereby such irrigation district shall agree to

pay the moneys required to be paid to the United States,

and in such event water-right applications on the part of

landowners and entrymen, in the discretion of the

Secretary of the Interior, may be dispensed with... .

42 Stat. 541 (1922) (codified in 43 U.S.C § 511).

* The Omnibus Adjustment Act of May 25, 1926, provides in pertinent

part:

No water shall be delivered upon the completion of

any new project or new division of a project initiated

after May 25, 1926, until a contract or contracts 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

10

Originally, the Department of the Interior

was given responsibility not only for

constructing the reclamation projects, but

also for administering the distribution of

water to agricultural users in a project

service area. In 1926, however, Congress

amended the reclamation laws to remove

from the Department the primary

responsibility for distributing water and

monitoring its use. Omnibus Adjustment Act

§ 46, 43 U.S.C. § 423e. Instead, the

Secretary of the Interior was directed to

enter into long-term water service contracts

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. . . .

Omnibus Adjustment Act of May 25, 1926, ch. 383, § 46, 44

Stat. 636 (1926) (codified in 43 U.S.C. § 423 (2004)).

11

with irrigation districts organized under state

law. It was left to the individual districts to

execute subcontracts with the actual users of

water and to deliver the water.

Peterson v. United States Department of the Interior, 899

F.2d 799, 804 (9th Cir. 1990).

To enable water users in reclamation projects to

comply with the new requirement that they contract through

districts, in 1917, the California legislature enacted a

statutory authorization for the creation of water districts, such

as Westlands and some of amici, for the express purpose of

entering into contracts with the Bureau of Reclamation for

delivery of water to their water users and collecting the

payments due to Reclamation.

Districts may cooperate and contract with

the United States under the Federal

Reclamation Act of June 17, 1902, and all

acts amendatory thereof or supplementary

thereto or any other act of Congress

heretofore or hereafter enacted permitting

cooperation.

Cal. Water Code § 23195 (2004); see also Cal. Water Code §

31150 (authorizing “County water districts” to contract with

federal government under reclamation laws); Cal. Water

Code § 35875 (authorizing “California water districts” to

contract with federal government under reclamation laws);

Cal. Water Code § 44000 (authorizing “California water

12

storage districts” to contract with federal government under

reclamation laws); Cal. Water Code § 50970 (authorizing

“reclamation districts” to contract with federal government

under reclamation laws); Cal. Water Code § 74610

(authorizing “water conservation districts” to contract with

federal government under reclamation laws).*

As the California Supreme Court has noted, in

entering into contracts, performing them, and suing to

enforce them, a water district is acting as a representative of

its landowners and water users. Coachella Valley County

Water District v. Stevens, 274 P. 538, 542 (Cal. 1929) (“[NJo

good reason has been suggested why . . . the landowners and

other water users in the district may not set up such a

governmental agency to act in a representative capacity in

their behalf.”)

* The Oregon legislature adopted similar legislation. See Or. Rev. Stat. §

545.511 (2004) (authorizing Board of Directors of irrigation districts to

order that an election to authorize contracts with the United States); Or.

Rev. Stat. § 547.355 (authorizing the board of supervisors of drainage

districts to enter into reclamation contracts with the United States); Or.

Rev. Stat. § 552.350 (authorizing Oregon “water improvement districts”

to “cooperate with the United States in the manner provided by Congress

for flood control, reclamation, conservation and allied purposes”); Or.

Rev. Stat. § 553.710 (authorizing Oregon “water control districts” to

enter into contracts for construction of works); Or. Rev. Stat. § 554.260

(authorizing the Board of Directors of Oregon corporations for irrigation,

drainage, water supply or flood control to enter into a contract with the

United States for maintenance and operation of any works).

As the Federal Circuit stated in finding that

the water users are third-party beneficiaries of these

contracts with the Bureau of Reclamation:

The irrigation districts, which contracted

with the Bureau, act as a surrogate for the

aggregation of farmers. They use no water

themselves. The farmers ultimately pay for

all the services which the government

supplies. It is clear that the appellants,

owners of the property at issue, the water,

also are intended third-party beneficiaries of

the 1945 Consent Decree.

H.F. Allen Orchards v. United States, 749 F.2d 1571, 1576

(Fed Cir. 1984) (citations omitted).

Il. Unlike Water Users Under Typical Utility

Contracts, the Water Users Under Reclamation

Act Contracts Hold a Property Right To Receive

Project Water.

As the Federal Circuit explained in H.F. Allen

Orchards, what makes the water delivery contract at issue in

this case distinguishable from a typical utility contract is that

the water users, the third-party beneficiaries, have

constitutionally protected rights to the project water upon

which the water delivery contracts between Reclamation and

the water district are based. H.F. Allen Orchards v. United

States, 749 F.2d 1571, 1576 (FeAl Cir. 1984) (“The irrigation

districts, which contracted with Reclamation, act as a

14

surrogate for the aggregation of farmers. They use no water

themselves. The farmers ultimately pay for all the services

which the government supplies.”).°

In the seminal case on this issue, Jckes v. Fox, 300

U.S. 82 (1937), a suit by 160 of Washington’s Yakima

Project water users to enjoin the Secretary’s threat to cut off

their irrigation water, this Court rejected the government’s

argument that such water users’ rights were defined solely by

the Sunnyside Water Users’ Association’s water delivery

contract with the United States. (Their third-party

beneficiary status under the contract does not appear to have

been questioned.) Holding that the reclamation project water

users hold vested property rights to receive their water from

Reclamation, quite apart from any contractual provision, this

Court stated:

Although the government diverted, stored,

and distributed the water, the contention of

5 Indeed, the water delivery contracts at issue in this case are

distinguishable from the contract at issue in Klamath Water Users Ass'n

v. Patterson, 204 F.3d 1206 (9th Cir. 1999), which was a contract to

operate a dam to produce hydropower. Klamath Water Users Ass'n v.

Patterson, 15 F. Supp.2d 990, 992 (D. Ore. 1998). In Patterson, the

district court had recognized that plaintiffs’ water rights derived from

their water delivery contracts, not the 1956 hydropower contract: “The

1956 contract is not the source of plaintiffs’ rights to water in the

Klamath Basin. Rather, their water rizhts are found primarily in their

individual repayment contracts with the federal government and in state

water law.” /d. at 996. The Ninth Circuit agreed.

15

petitioner that thereby ownership of the Id. at 95-96.

water or water-rights became vested in the

United States is not well founded.

Appropriation was made not for the use of

the government, but, under the Reclamation

Act, for the use of the landowners; and by

the terms of the law and of the contract

already referred to, the water rights became

the property of the landowners, wholly

distinct from the property right of the

government in the irrigation works. The

government was and remained simply a

Next, in Nebraska v. Wyoming, 325 U.S. 589 (1945),

an original proceeding to apportion the waters of the Platt

River, the United States claimed ownership of waters

impounded by the North Platt and Kendrick Act projects.

Rejecting the United States’ argument, this Court reiterated

its Ickes holding that the water users (here represented by the

state) held a property right in the reclamation project water:

carrier and distributor of the water, with the

right to receive the sums stipulated in the

contracts as reimbursement for the cost of

construction and annual charges for

operation and maintenance of the works. As

security therefore, it was provided that the

government should have a lien upon the

lands and the water rights appurtenant

thereto — a provision which in itself imports

that the water rights belong to another than

the lienor, that is to say, to the landowner.

Id. at 94-95 (citations omitted).

This Court so declared because the Reclamation

water right was appurtenant to the land:

[I]t long has been established law that the

right to the use of water can be acquired

only by prior appropriation for beneficial

use; and that such right when thus obtained

isa property right, which, when acquired for

irrigation, becomes, by state law and here by

express provision of the Reclamation Act as

well, part and parcel of the land upon which

it is applied.

16

The property right in the water right is

separate and distinct from the property right in

the reservoirs, ditches or canals. The water

right is appurtenant to the land, the owner of

which is the appropriator. The water right is

acquired by perfecting an appropriation, i.e.,

by an actual diversion followed by an

application within a reasonable time of the

water to a beneficial use. Indeed [Section] 8

of the Reclamation Act provides as we have

seen that “the right to the 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.”

*** *

The rights of the United States in respect to

the storage of water are recognized. So are

the water rights of the landowners. To

allocate those water rights to the United States

would be to disregard the rights of the

landowners.

Id. at 614-16 (citations omitted).

17

And, in Nevada v. United States, 463 U.S. 110

(1983), this Court prohibited the Bureau of Reclamation from

depriving water users in Nevada’s Newlands Project of their

property right to receive water. This Court opened its

analysis by stating: “We are bound to say that the

Government’s position, if accepted, would do away with half

a century of decided case law relating to the Reclamation Act

of 1902 and water rights in the public domain of the West.”

Id. at 121.

After reviewing its prior holdings in Jckes and

Nebraska, this Court then stated:

In the light of these cases, we conclude that

the Government is completely mistaken if it

believes that the water rights confirmed to it

by the Orr Ditch decree in 1944 for use in

irrigating lands within the Newlands

Reclamation Project were like so many

bushels of wheat, to be bartered, sold, or

shifted about as the Government might see

fit. Once these lands were acquired by

settlers in the Project, the Government’s

“ownership” of the water rights was at most

nominal; the beneficial interest in the rights

confirmed to the Government resided in the

owners of the land within the Project to

which these water rights became

appurtenant upon the application of Project

water to the land. As in Jckes v. Fox and

Nebraska v. Wyoming, the law of relevant

State and the contracts entered into by the

landowners and the United States make this

18

point very clear.

Id. at 126.

The United States itself has affirmed the vitality of

these holdings that reclamation project water users own a

property right in the project’s water. See Filings of Claims

for Water Rights in General Stream Adjudication, Op.

Solicitor, Dep’t of Interior, 97 Interior Dec. 21, 25; 1989 WL

506913 at *1, 5 (July 6, 1989) (“[T]he water user who puts

the project water to beneficial use obtains a vested property

interest in the water right.”). This interpretation is entitled to

great weight. California v. United States, 438 U.S. 645, 676

n.30 (1978).° _

® This Solicitor’s Opinion is, in fact, binding on all Interior Department

officials. As the Department of Interior, Department Manual states:

A. The responsibilities of the Solicitor in 209 DM 3.1A

include but are not limited to the authority:

(11) To issue’ final legal

interpretations, in the form of M-

Opinions published in Decisions of

the United States Department of the

Interior, on all matters within the

jurisdiction of the Department, which

shall be binding, when signed, on all

other Departmental offices and

officials and which may be overruled

or modified only by the Solicitor, the

Deputy Secretary, or the Secretary.

Department of Interior, Departmental Manual, 209 DM 3.2, Authority in

Specified Matters, available at http://elips.doi.gov/elips/release/3537.htm

(last visited November 19, 2004). In Kentucky Resources Council, Inc. v.

Office of Surface Mining, 155 IBLA 354 (2001), the Interior Department

Board of Appeals stated that under this provision, it was bound to follow

the analysis of a prior Interior Solicitor’s Opinion: “Because we are

19

Petitioners hold water rights that entitle them to

receive all the water from the reclamation project that they

can beneficially use. CAL. CONST. Art. X, § 2. In Western

water law, any right to the use of surface water for irrigation

water is appurtenant to the land, subject to beneficial use.

Nevada v. United States, 463 U.S. 110, 126 (1983) (“Once

these lands were acquired by settlers in the Project, the

Government’s ‘ownership’ of the water rights was at most

nominal; the beneficial interest in the rights confirmed to the

Government resided in the owners of the land within the

Project to which these water rights became appurtenant upon

the application of Project water to the land.”).

“The Supreme Court has determined that for water

rights obtained by the Bureau in the name of the United

States, the water user who puts the project water to beneficial

use obtains a vested property interest in the water right.” 97

Interior Dec. 21, 25; 1989 WL 506913 at *1,5. The

Solicitor’s 1989 opinion comprehensively analyzes the

property right in the water use arising from the beneficial use

of the water:

Since Ickes v. Fox, the principal that the

proprietary interest in the project water right is

in the project water users who put the water to

bound by the Solicitor’s Opinion, as approved by the Secretary, see 209

DM 3.2A(11), we review the OSM Assistant Director’s July 20, 1994,

decision in accordance with the analysis in that Opinion.” Jd. at 355.

20

beneficial use has been reaffirmed by the

Supreme Court on two occasions. In

Nebraska v. Wyoming, 325 U.S. 589 (1045),

the Court . . . found that individual

landowners who had put the project water to

beneficial use, thereby “perfecting” the water

right obtained by the United States, had

“become the appropriators of the water rights,

the United States being the storer and the

carrier.”

** *

Finally, in Nevada v. United States, the

Supreme Court addressed Government

arguments that water decreed to the United

States for the Newlands reclamation project in

Nevada could be reallocated to an Indian

reservation.

* * *

With the issuance of Nevada v. United States,

the Supreme Court, conclusively reaffirmed

the concept that beneficial ownership of

reclamation project water right is in the water

users who put the water to beneficial use.

97 Interior Dec. 21, 26-27; 1989 WL 506913 at *1, 6

(citations omitted).

Further, in connection with passage cf the McCarran

Amendment’ in 1951, the Justice Department told the Senate

’ The McCarran Amendment was enacted to permit the joinder of the

United States as a party defendant in any suit for the adjudication of

rights to the use of water. Act of July 10, 1952, § 208(d), 66 Stat. 560.

21

that the water users’ water rights are compensable property

rights:

Mr. Veeder: Certainly they have a legal

remedy in damages always where the United

States has taken more water than it should

have. The fifth amendment of the

Constitution is the greatest guaranty to a

water user that he is not going to be

damaged.

Senator Watkins: How can he enforce it?

Mr. Veeder: He simply goes into the

Federal district court and sues the United

States if it is not over $10,000. If it is over

$10,000 he goes to the Court of Federal

Claims. We are confronted with that all the

time. The Gerlach case [United States v.

Gerlach Live Stock Co., 339 US. 725

(1950)] is a historic case. They came in and

sued us and we paid them.

** *

Senator Watkins: Suppose it interferes

substantially with the rights of others when

they impound it? If it does, what happens

then?

Mr. Veeder: I think, then, if any act that we

do transgresses the rights of any individual,

in my estimation the fifth amendment

protects them completely, and they can sue

us.

A Bill to Authorize Suits Against the United States to

Adjudicate and Administer Water Rights Before a

Subcommittee of the Committee on the Judiciary of the

United States Senate, 82nd Cong. (Apr. 25, Aug. 3 and 8,

22

1951) (statement of William H. Veeder, Special Assistant to

Attorney General, DOJ).

Thus, as the Government has previously conceded on

numerous occasions, water users’ rights in this water are

compensable property, and the very legislative scheme that

permits the government to contract with irrigation districts

was created specifically to help landowners manage that

property. The Fifth Amendment requires that those

landowners have the ability to vindicate the taking of those

property rights by an action for just compensation. See First

English Evangelical Lutheran Church of Glendale v. County

of Los Angeles, 482 U.S. 304 (1987) (holding state

constitutionally required to provide just compensation

remedy); City of Monterey v. Del Monte Dunes at Monterey,

Ltd., 526 U.S. 687 (1999) (holding plaintiff had right to jury

trial to determine just compensation).

Ill. As Beneficial Owner of the Water Right and

Beneficial User of the Water, the Irrig..0 Must

Be Provided a Legal Process To Vindicat: This

Right.

In California, as in the other western states, “[a]ll

water within the State is the property of the people of the

State, but the right to the use of water may be acquired by

appropriation in the manner provided by law.” Cal. Water

Code § 102 (2004). Thus, the term “water right” denotes the

23

legal right in California “to use the water.” Fullerton v. State

Water Resources Control Board, 90 Cal. App. 3d 590, 598

(1979); Rancho Santa Margarita v. Vail, 81 P.2d 533, 11

Cal.2d 501, 554-55 (1938); Eddy v. Simpson, 3 Cal. 249, 252

(1853).

Since 1914, the manner provided by California law

for the acquisition of surface water rights has been

appropriation by the State Water Resources Control Board

and its predecessors, which possess sole authority to grant

rights to divert and store appropriated surface water in

California. Cal. Water Code §§ 1201, 1202, 1225; see also

Cal. Water Code § 1253 (“The board shall allow the

appropriation for beneficial purposes of unappropriated water

under such terms and conditions as in its judgment will best

develop, conserve, and utilize in the public interest the water

sought to be appropriated.”’).

Because water is a scarce commodity, California, like

the other Western states, has adopted the doctrine of

beneficial use, which “prohibits waste of water, requires

reasonableness of use, method of use, and method of

diversion for all uses of water. . . .To the extent the use is

wasteful or otherwise unreasonable, it is not part of a water

right.” Arthur L. Littleworth & Eric L. Garner, California

Water 28 (1995). Under this doctrine it is the water users,

not Reclamation, who make beneficial use of the irrigation

24

water, and this is the sine qua non of the water right permits

issued by the California State Water Board. See, e.g.,

California v. United States, 438 U.S. 645, 650-52 (1978) (“If

the term “cooperative federalism” had been in vogue in 1902,

the Reclamation Act of that year would surely have qualified

as a leading example of it... . The history of the relationship

between the Federal Government and the States in the

reclamation of the arid lands of the Western States is both

long and involved, but through it runs the consistent thread of

purposeful and continued deference to state water law by

Congress.”).

Congress, in the Reclamation Act itself, established

that:

The right to the use of water acquired under

the provision 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.

Reclamation Act of 1902, ch. 1093 § 8, 32 Stat. 388 (1902)

(amended and codified in 43 U.S.C. § 372 (2003)).

Accordingly, in Ickes, this Court determined that an :

arbitrary contractual limit on the quantity of water to be

delivered to Yakima Project irrigators was superceded by the

beneficial use rule embedded in both the Reclamation Act

and state law because “Under the Reclamation Act, . . . as

well as under the law of Washington, ‘beneficial use’ was

25

‘the basis, the measure, and the limit of the right.’” Jckes v. put the water to beneficial use.” 97 Interior Dec. 21, 27; 1989

Fox, 300 U.S. 82, 94 (1937) (citation omitted). WL 506913 at *1, 6.

On remand, the D.C. Circuit Court of Appeals With respect to the Government’s mere legal title to

expanded on this holding: project water, the Interior Solicitor observed:

The water-rights of appellants are not

determined by contract but by beneficial use.

The Secretary of the Interior in operating the

project is in the position of a carrier of water

to all entrymen in the Reclamation project.

He is not obligated to furnish any more water

than is available. Under the Reclamation Act

he is not authorized to furnish any water at all

except for beneficial use. He must distribute

the available water according to the priorities

among the different users which are

established by the law of the State of

Washington.

At first glance, the pronouncement of the

Supreme Court in Ickes and Nebraska would

appear to indicate that upon application by

water users of project waters to beneficial

uses, all interests incident to the water right

flow to the project water users. However, as

pointed out in Nebraska v. United States,

these cases “discuss[] the beneficial

ownership of water rights in irrigation

projects build pursuant to the Reclamation

Act.” Nevada likewise clarifies that where

project water rights are obtained by and

remain in the name of the United States, the

Federal Government retains legal title. This

point is important because the Court in

Nevada speaks of “obligations that

—_ necessarily devolve upon [the United States]

Fox, the principle that the proprietary interest in the project from having mere title to water rights . . .”

Fox v. Ickes, 137 F.2d 30, 33 (D.C. Cir. 1943).

As the Interior Solicitor noted in 1989, “Since Ickes v.

water right is in the project water users who put th t

Pro) ae ee 97 Interior Dec. 21, 27; 1989 WL 506913 at *1, 6 (citations

omitted). After recognizing the limited claim the United

States had to this water, the Solicitor noted the obligations

beneficial use has been reaffirmed by the Supreme Court on

two occasions.” 97 Interior Dec. 21, 26; 1989 WL 506913 at

*1,6. The Interior Solicitor also stated that “[w]ith the

, incumbent upon the Government by virtue of possession of

issuance of Nevada v. United States, the Supreme Court,

that title:

conclusively reaffirmed the concept that beneficial ownership First, it appears clear that the Court in

i

of a reclamation project water right is in the water users who Nevada was referring to the obligation of

this Department to obtain necessary water

rights for authorized projects pursuant to

26 27

section 8 [of the Reclamation Act]. The

Court, in reviewing the dual responsibilities

that Congress placed upon the Secretary to

represent Indian interest and also obtain

project water rights stated: “ . . . Congress

has imposed upon the United Stats in

addition to its duty to represent Indian tribes,

a duty to obtain water rights for reclamation

projects...”

Beyond the obligation to obtain water, we

also find support in Nevada for the

proposition that the United States is

obligated at least to do what is necessary to

preserve, maintain, protect, or have

confirmed project water rights that are held

in the name of the United States. While less

explicit than the obligation to obtain initially

the water right, we believe the Court’s

further discussion of the United States’

general obligations to deliver water to the

Reservation use with an earlier priority.” In

rejecting the Government’s position, the

Court pointed out that the argument that

water decreed to the United States in the Orr

Ditch decree for project purposes could be

reallocated away from those purposes,

“seems wholly to ignore . . . the obligations

that necessarily devolve upon [the United

States] from having mere title to water rights

for the Newlands Project, when the

beneficial ownership of these water rights

resides elsewhere.” Thus, in attempting to

reallocate water away from the project, the

Federal Government was ignoring and

failing to meet its obligation, as titleholder

of the project water right, to maintain the

project water supply in the amount which

had previously been decreed to the project

and to which the water users had acquired

beneficial ownership.

97 Interior Dec. 21, 28; 1989 WL 506913 at *1, 7 (citations

omitted).

In sum, Reclamation is constrained by the fact that

title to the water is divided. As noted, the federal

beneficial owners of project water rights

indicates this result. In Nevada, the Court

specifically held that the Government could

not reallocate project water in a manner that

would impair its obligation as legal

titleholder to deliver project water to project

beneficiaries . .. . government retains only legal title to reclamation water.

97 Interior Dec. 21, 27-28; 1989 WL 506913 at *1, 7 Nevada v. United States, 463 U.S. 110, 127 (1983); 97

(citations omitted). Interior Dec. 21, 29, 1989 WL 506913 at *1, 8. Reclamation

The Federal Government opened its brief in is not the beneficial user of the water, a point that it has long-

Nevada by stating: “The court of appeals has

simply permitted a reallocation of the water

decreed in Orr Ditch to a single party — the

United States — from reclamation uses to a

since conceded. That beneficial interest in the water is a

vested property right appurtenant to petitioners’ lands, and

beneficial use is the “measure and limit” of that right.

28 29

Therefore, because the law recognizes both the beneficial

interest and the property interest of landowners in the water

(of which they make beneficial use), the Fifth Amendment

requires a procedure by which that right can be vindicated.

See, e.g., Jacobs v. United States, 290 U.S. 13, 16 (1933)

(“The-suits were based on the right to recover just

compensation for property taken by the United States for

public use in the exercise of its power of eminent domain.

That right was guaranteed by the Constitution.”).

CONCLUSION

For all of these reasons, amici curiae urge this Court

to reverse the decision below.

Respectfully submitted,

Nancie G. Marzulla*

Roger J. Marzulla

MARZULLA & MARZULLA

1350 Connecticut Ave., N.W.

Suite 410

Washington, DC 20036

(202) 822-6760

Dated: November 26, 2004 *Counsel of record for Amici

Curiae

—

30