Appendix — Boston Ranch Co. v. Department of the Interior

90-4 09 | FILED

No. JOSEPH F. SPANIOL, JR.

“%

IN THE

Supreme Court of the United States

OcTOBER TERM, 1990

BOSTON RANCH COMPANY,

EDWIN R. O’NEILL,

WEST HAVEN FARMING CO.,

Petitioners,

vs.

UNITED STATES DEPARTMENT

OF THE INTERIOR,

Respondent.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

APPENDIX TO

PETITION FOR WRIT OF CERTIORARI

WILLIAM M. SMILAND

Counsel of Record

Of Counsel. DONNELLY, CLARK,

CHASE & SMILAND

HAL S. SCOTT Twelfth Floor

1557 Massachusetts Avenue 601 West Fifth Street

Cambridge, MA 02138 Los Angeles, California 90071

(617) 495-4590 (213) 891-1010

Attorneys for Petitioners

Lawyers Bnef Service / Legal Printers / (213) 383-4457 / (714) 720-1510

No.

IN THE

Supreme Court of the United States

OCTOBER TERM, 1990

BOSTON RANCH COMPANY,

EDWIN R. O’NEILL,

WEST HAVEN FARMING CO.,

Petitioners,

vs.

UNITED STATES DEPARTMENT

OF THE INTERIOR,

Respondent.

ON PETITION FOR WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

APPENDIX TO

PETITION FOR WRIT OF CERTIORARI

WILLIAM M. SMILAND

Counsel of Record

Of Counsel: DONNELLY, CLARK,

CHASE & SMILAND

HAL S. SCOTT Twelfth Floor

1557 Massachusetts Avenue 601 West Fifth Street

Cambridge, MA 02138 Los Angeles, California 90071

(617) 495-4590 (213) 891-1010

Attorneys for Petitioners

PT i

TABLE OF CONTENTS

Page

OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE

NINTH CIRCUIT AND DISSENT,

FILED MARCH 16, 1990, AS

AMENDED JUNE 7, 1990............. Al

ORDER OF THE UNITED STATES

COURT OF APPEALS FOR THE

NINTH CIRCUIT AMENDING THE

OPINION, DENYING THE PETI-

TION FOR REHEARING, AND RE-

JECTING THE SUGGESTION FOR

REHEARING EN BANC, DATED

oo RE IE eS ee Bl

MEMORANDUM DECISION RE:

MOTION TO ENFORCE JUDG-

MENT, FILED AUGUST 10, 1988

AND ORDER DENYING MOTION

TO ENFORCE THE JUDGMENT OF

THE UNITED DISTRICT COURT

FOR THE EASTERN DISTRICT OF

CALIFORNIA, FILED DECEMBER

eR ee eee ee Cl

ARTICLE I, SECTION 1, ARTICLE

Ill, SECTIONS 1 AND 2, AND

FIFTH AMENDMENT OF THE

UNITED STATES CONSTITUTION ....D1

SECTION 9(e) RECLAMATION

PROJECT ACT OF 1939, ch. 418, 53

Stat. 1193; 43 U:S.C. § 485h(e).......... El

: -

:

aie

o 14 «

SECTION 46 OMNIBUS ADJUST-

MENT ACT OF 1926, ch. 383, 44

Stat. 649; 43 U.S.C. § 423e..........

SECTION 203(b) (first sentence),

SECTION 209(e), AND SECTION

205(c) RECLAMATION REFORM

ACT OF 1982; 43 U.S.C. §§ 390cc(b)

(first sentence), 390ii(e), 390ee(c).....

FORMER INTERIOR RULE 11(1)(4)

(1983); FORMER 43 CFR § 426.11

CE a ies whe Me Rea dads.

SECTION 5302 OMNIBUS BUDGET

RECONCILIATION ACT OF 1987,

adding inter alia § 224(h), RECLA-

MATION REFORM ACT; 43 U.S.C.

PN Sh Ghee s ded ks

CURRENT INTERIOR RULE

11(i)(4) (1989); 43 CFR 426.11(i)(4)

SELECTED EXCERPTS OF JUNE 5,

1963 CONTRACT BETWEEN THE

UNITED STATES AND _ WEST-

LANDS WATER DISTRICT PRO-

VIDING FOR WATER SERVICE.....

EXEMPLAR OF RECORDABLE

CAEN 6 0a'0 + ARR RCRA ROR UE BO 8

EXEMPLAR OF AMENDATORY

RECORDABLE CONTRACT........

Page

- ili -

Page

SELECTED PARAGRAPHS OF

DECEMBER 30, 1986 JUDGMENT

ENTERED IN BARCELLOS AND

WOLFSEN, INC., et al., v. WEST-

LANDS WATER DISTRICT, et al.,

E.D. Cal. No. CV 79-106-EDP .......... Nl

<tnetene'

APPENDIX A

-A 1-

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BARCELLOS AND WOLFSEN, INC., et

al.,

Plaintiffs,

and

BOSTON RANCH COMPANY; EDWIN

R. O’NEILL; West HAVEN FARMING No. 89-15098

Co., D.C. No. ;

Plaintiffs-Appellants, | CV-79-0106-EDP

V. ORDER AND

AMENDED

WESTLANDS WATER DISTRICT, et al., OPINION

Defendants,

and

UNITED STATES DEPARTMENT OF

INTERIOR,

Defendant-Appellee.

Appeal from the United States District Court

for the Eastern District of California

Edward D. Price, District Judge, Presiding

Argued and Submitted

October 4, 1989—San Francisco, California

Filed March 16, 1990

Amended June 7, 1990

Before: Betty B. Fletcher, Warren J. Ferguson and

Ferdinand F. Fernandez, Circuit Judges.

Opinion by Judge Fletcher; Dissent by Judge Fernandez

5819

-A 2-

Barce.tos & WOLFSEN v. WESTLANDS Water Dist. 5823

COUNSEL

William M. Smiland, Donnelly, Clark, Chase & Smiland, Los

Angeles, California, for the plaintiffs-appellants.

Robert L. Klarquist, United States Department of Justice,

Washington, D.C., for the defendant-appellee.

OPINION

FLETCHER, Circuit Judge:

Boston Ranch Company, Edwin R. O'Neill, and West

Haven Farming Company appeal the district court's denial of

their motion to order the Department of Interior to sell water

to them at a certain price pursuant to a contract incorporated

-A 3-

5824 Barce.ros & WOLFSEN v. WeESTLANDS WaTeER Dist.

into a consent judgment. They argue that § 224(h) of the Rec-

lamation Reform Act of 1982, 43 U.S.C. § 390ww(h), if

applied to them, impairs their contract rights and interferes

with the consent judgment in violation of due process and the

separation of powers required by the Constitution. We affirm

the district court.

FACTUAL AND STATUTORY BACKGROUND

This appeal turns on the interpretation of contracts made

and a judgment rendered under the aegis of the Reclamation

Act of 1902, 32 Stat. 388, and subsequent statutes amending

it. The purpose of the original 1902 Act was to encourage peo-

ple to Go West, not to engage in big-time speculation, see

Ivanhoe Irrig. Dist. v. McCracken, 357 U.S. 275, 297 (1958),

but to grow crops on modest family farms in the country’s

drier regions so that the nation’s agricultural bounty would

increase. The Act promoted the farming of lands in the arid

West by creating a system under which the federal govern-

ment would provide funds to build water projects from which

water would be sold at a subsidized price. The Interior

Department was directed to charge water users prices that

would recapture the cost of building the project exclusive of

interest. 43 U.S.C. § 461. The original 1902 Act allowed this

subsidized water to be sold only to resident farmers and only

for parcels of land no larger than 160 acres. 43 U.S.C. § 431.

But the strict restriction against larger farms inhibited Con-

gress’ goal of increasing agricultural production. In 1926

Congress amended the Act to allow Interior to sell water for

larger tracts, but only if the owner promised to divest himself

of the lands in excess of 160 acres on terms to be worked out

by Interior. 43 U.S.C. § 423e.

The appellants are landowners. Each owns more than one

thousand acres of farm land in California’s Central Valley.

They buy water from the Westlands Water District (the Dis-

trict). The District and the Department of Interior (Interior)

entered into a contract in 1963 (the 1963 Contract), under

-A 4-

BarCELLOS & WOLFSEN v. WesTLanos Water Dist. 5825

which the District bought water at a subsidized rate of $8.00

per acre foot (including a $0.50 drainage service component)

from a federal reclamation project (the Project) for resale

under certain conditions to subscribers within the District.

As subscribers, the appellants are beneficiaries of the 1963

Contract, even though they are not parties to it.

The 1963 contract prohibits the District from furnishing

Project water to an owner who wishes to use the water to irri-

gate his “excess lands,” or lands in excess of 160 acres,’ unless

the owner agrees in a separate, recordable contract with Inte-

rior to certain significant restraints on his rights to the excess

lands.Each appellant entered into at least one such recordable

contract with Interior between 1969 and 1974.* The appel-

lants’ recordable contracts are identical except for the

description of the owner’s particular excess lands.

Article 5 of the recordable contracts provides:

All rights of the Landowner to receive Project Water

for its excess lands shall be subject to the provisions

of the District Contract and this contract.

Article 25(b)(i) of the District Contract states that as a con-

dition precedent to the right to receive Project water, the

landowner shall

[agree] to dispose of his land . . . to persons who can

take title thereto as nonexcess land ... within a

period ten (10) years after the date of the execution

of said recordable contract and agree{ } further that

*320 acres for a husband and wife owning land jointly.

7Appellant Boston Ranch executed two recordable contracts in 1972,

covering 23,711 acres of excess lands. Appcilant O'Neill executed three

recordable contracts in 1969 and 1970, covering 974 excess acres. Appel-

lant West Haven Farming Co. executed five recordable contracts in 1973

and 1974, covering 5,556 excess acres.

Ir t—t—“—__

-A 5-

5826 Barcettos & WoLFSEN v. WESTLANDS WaTER Dist.

if said land is not so disposed of within . . . ten years,

the Secretary [of Interior] shall have the power to

dispose of said land . . . on behalf of such large land-

owner.

The District contract and the recordable contracts provide

not only that the landowner must sell his excess land within

ten years, but also that he must sell at an artificially low

appraised price—artificially low because the appraiser may

not take into account the fact that the owner of the land has

access to water from the Project. Furthermore, the landowner

may not sell his excess lands without Interior’s approval.

Although the contracts give the landowner a ten-year

period during which he may transfer his excess lands without

being subject to the Secretary of Interior’s power of attorney

over the lands, Article 13 of the recordable contracts pro-

vides:

the computation of the ten-year period . . . shall not

include any year or years in which water or service

from the Project may not be available to the land

involved through no. fault of the District or the

Landowner.

Article 13 is potentially important to this dispute, because

during the ten-year term of the several recordable contracts at

issue, events intervened to prevent the contracts from being

performed according to the original design.

In 1976, a federal district court issued an injunction against

the Department of Interior, prohibiting it from approving

excess land sales pursuant to recordable contracts until Inte-

rior promulgated, in accordance with the Administrative Pro-

cedure Act, rules governing the criteria and procedures for

approving such sales. National Land for People v. Bureau of

Reclamation, 417 F.Supp. 449 (D.D.C. 1976). While the

injunction was in effect, from 1976 to 1982, the appellants

-A 6-

BARCELLOS & WOLFSEN Vv. WESTLANDS WaTER Dist. 5827

were not permitted to sell their excess lands in the manner

envisioned by the recordable contracts. However, only one

appellant, O’Neill, attempted to sell.’

With regard to those excess lands governed by recordable

contracts executed prior to 1972, the ten-year period in which

to sell expired at some time during the period the injunction

was in effect. Nonetheless, during this period, Interior pro-

vided Project water at the same rate for lands whose t 'n years

had run as for those whose time had not run. It is disputed

whether the contracts required this treatment or whether

Interior was simply attempting to act equitably in light of a

circumstance (the injunction) unforeseeable at the time it

entered into the various contracts with the District and the

landowners.

The landowners argue that Article 13 must be construed to

toli the ten-year period for disposing of land, because Interi-

or’s approving excess land sales is a “service.” They also argue

that if the injunction tolled the ten-year period for disposing

of their excess lands, it also provided them with extra time to

receive water from the Project at a subsidized price. They

point to Article 8 of the recordable contracts, which provides:

None of the excess land ... shall be entitled to

receive water nor shall service be made available to

such land pursuant to the District Contract, except

while owned by the Landowner, unless the same

shall have been sold to a person who [would be]

qualified as a nonexcess landowner to receive Proj-

ect water...

Appellants argue that Article 8 must be construed to mean

that as long as a landowner owns excess lands under record-

able contract, he is entitled to receive subsidized Project

30’Neill filed a separate lawsuit concerning his right to sell.

ae

eS

-A 7-

5828 BarceLLos & WOLFSEN v. WESTLANDS WATER Dist.

water for those lands. The merits of these arguments are dis-

cussed elsewhere.

In 1978, the Solicitor of the Interior Department, Leo

Krulitz, issued a legal opinion stating that the $8.00 rate spec-

ified in the 1963 Contract was inadequate to recover the

escalating costs of the Project and was therefore contrary to

the federal reclamation laws, see 43 U.S.C. § 461, and not

binding. Op. Solic. 85 Interior Dec. 297 (1978). The Krulitz

opinion did not address the question of whether excess lands

under recordable contracts for more than ten years should

receive Project water at the same price as other land or

whether they should receive Project water at all. As a result of

the Krulitz opinion, the Interior Department began to charge

the District between $13.30 and $16.40 per acre foot for all

Project water.

In 1979 the appellants sued the District in state court, seek-

ing among other things to have the $8.00 rate enforced. The

District joined the United States as a party and removed the

action to United States District Court for the Eastern District

of California. While the parties were litigating this action, a

number of changes in the law occurred.

In 1982, partly as a result of the injunction against Interior

concerning excess land sales, Congress passed the Reclama-

tion Reform Act of 1982 (RRA), 43 U.S.C. §§ 390aa et seq.,

which comprehensively revised reclamation law. The RRA

explicitly required Interior to establish rules for disposing of

excess lands over which it had a power of attorney, RRA

§ 209(d), 43 U.S.C. § 390ii(d), and it thus superseded the

injunction.

The RRA created a new regime of benefits and burdens for

excess landowners that would apply to all contracts between

Interior and water districts entered into or amended after the

date of enactment.‘ It also provided for a transition regime,

“It is undisputed that the stipulated judgment is not an amended contract

for the purposes of the Act.

-A 8-

BARCELLOS & WOLFSEN v. WESTLANDS WaTER Dist. 5829

allowing districts and landowners already parties to contracts

with Interior to operate in substantially the same manner as

they had under the prior law but with some changes. Section

203(b), 43 U.S.C. § 390cc(b), provided that districts with

such existing contracts would be “subject to federal reclama-

tion law in effect immediately prior to the date of enactment

of this Act, as that law is amended or supplemented by sec-

tions 209 through 230 of this title.” Under this transition

regime, the landowner would be entitled to receive water at

the price provided in the pre-existing contract. Section

203(c), 43 U.S.C. § 390ce(b), allowed a landowner with a pre-

existing contract to elect to be treated under the new regime

rather than the transition regime. The new regime increased

from 160 to 960 acres the amount of land not subject to the

burdens imposed on “excess lands,” but at the same time it

increased the price of water, requiring that water for excess

lands (those in excess of 960 acres) be sold at “full cost.”*

These higher excess land limits and provisions for full cost

pricing were set forth in §§ 203-208 of the Act, 43 U.S.C.

§§ 390cc-390hh, and are sometimes referred to as the

“discretionary provisions” of the Act because any recipient

may choose to come under them.

Section 209(e) of the Act, 43 U.S.C. § 390ii(e), governed

the effect of the 1976 injunction on pre-existing recordable

contracts. It provided that the period of time provided in the

contracts for the landowner to dispose of excess lands would

“be extended from the date on which the Secretary again

commences the processing . . . of the disposition of such lands

for a period equal to the remaining period of time under the

recordable contract for the disposal thereof by the owner at

the time [of the injunction].” Section 209(e) did not specify

whether the price of water during the extended period would

be the old contract rate or the full cost rate.

*The full cost price is calculated to recapture interest on the govern-

ment’s construction costs.

-A9-

5830 BARCELLOS & WOLFSEN v. WESTLANDS WATER Dist.

Section 205(c) of the Act, 43 U.S.C. § 390ee(c) provided:

Notwithstanding any extension of time of any

recordable contract as provided in section 209(e) of

this title, lands under recordable contract shall be

eligible to receive irrigation water at less than full

cost for a period not to exceed ten years from the

date such recordable cc .tract was executed by the

Secretary in the case of contracts existing prior to the

date of enactment of this Act ... Provided, That in

no case shall the right to receive water at less than

full cost under this subsection terminate sooner than

eighteen months after the date on which the Secre-

tary again commences the processing or the

approval of the disposition of such lands.

Because § 203(b) provided that water recipients with pre-

- existing contracts were subject to prior law as supplemented

by §§ 209-230, but did not provide explicitly that they were

subject exclusively to those provisions, it was unclear whether

§ 205 applied to those recipients.

In May of 1983, shortly after the Act was passed, Interior

issued a proposed regulation providing that § 205 did apply

to prior law recipients and was thus part of the transition

regime.® 48 Fed. Reg. 19911, 19913 (May 3, 1983). But in

‘In its entirety, the proposed rule provided:

A landowner who has land under an extended recordable contract

may continue to receive irrigation water for that land at the con-

tract water rate for the full term of the original contract. However, .

the landowner must pay the full cost rate during the entire

extended contract period unless the contract lapsed during the

moratorium [i.e. the injunction] or matured within eighteen

months of the date the moratotium was lifted. If the maturity date

under the original contract lapsed during a moratorium or if the

original contract matures within eighteen months of the date a

moratorium was lifted, the landowner may receive irrigation

-A 10-

BARCELLOS & WOLFSEN v. WESTLANDS WaTER Dist. 5831

December of 1983, Interior changed its position and issued

Final Rule 11(i)(4) providing:

Land under recordable contract which is held by a

water user not subject to the discretionary provi-

sions may continue to receive irrigation water at the

contract water rate for the extended term of the con-

tract....

48 Fed. Reg. 54,781 (former 43 C.F.R. § 426.11(i)(4)).

In 1984, the appellants’ recordable contracts were

amended in accordance with § 209(e) to extend the period of

time for disposing of their excess lands.’ The contracts were

not amended to reflect the provision in Interior’s Final Rule

1 1(i)(4) that the price of water would remain at the same con-

tract rate during the extended period.

Meanwhile, negotiations for a settlement of the underlying

1979 lawsuit were proceeding apace. Congress was interested

in the outcome of the lawsuit, and on December 19, 1985

passed section 122 of an appropriations bill, Public Law 99-

190, which provided:

None of the funds made available by this or any

other Act for fiscal year 1986 to the Office of the Sec-

retary, Department of Interior, shall be expended to

water at the contract rate for no more than eighteen months after

the processing of excess land resumes. Thereafter the landowner

must pay the full cost of the irrigation water delivered during the

extension period.

48 Fed. Reg. at 19913.

7The contracts were extended by approximately eight years, the length of

time of the moratorium on excess land sales.

Mr. O’Neill’s contract had not been so amended because he was in the

process of disposing of his excess lands.

-A 11-

5832 BARCELLOS & WOLFSEN v. WESTLANDS WATER DisT.

submit to the United States District Court for East-

ern California any settlement with respect to West-

lands Water District v. United States, et. al... . until

(1) April 15, 1986, and (2) until the Congress has

received from the Secretary and reviewed for a

period of 30 days a copy of the proposed settlement

agreement which has been approved and signed by

the Secretary.

In June of 1986, Interior Solicitor Ralph W. Tarr rescinded

the 1978 Krulitz opinion.

On July 24, 1986, the parties agreed to a stipulated judg-

ment in the underlying action. Pursuant to P.L. 99-190,

§ 122, the Secretary submitted the settlement to Congress.

The Subcommittee on Water and Power Resources of the

House Committee on Interior and Insular Affairs, chaired by

Congressman George Miller, held public hearings. Congress-

man Miller proposed an amendment to an appropriations bill

which would have prohibited the settlement, and the amend-

ment passed the House on July 31, 1986. However, the appro-

priations bill passed by the Senate and enacted into law did

not contain the Miller amendment. The thirty days provided

in § 122 elapsed.

On August 29, 1986 the court entered a stipulated judg-

ment. For our purposes, two aspects of the judgment are rele-

vant. First, the judgment provided for refunds to landowners

of all water payments in excess of the $8.00 contract rate

made since the time of the Krulitz opinion, including, as per

Final Rule 11(i)(4), payments in excess of the $8.00 rate for

water used on excess lands controlled by the landowners for

the extended period provided in § 209(e) of the Act. Second,

the judgment provided that “[t]he 1963 Contract is a valid,

enforceable and implementable contract entitling the District

through the end of 2007 to water and other service as speci-

fied therein,” and further provided that “the United States

-A 12-

BARCELLOS & WOLFSEN v. WESTLANDS WATER Dist. 5833

shall perform the 1963 Contract[.]” The judgment was not

appealed.

In December of 1987, Congress amended the RRA by

enacting a new section 224(h), 43 U.S.C. § 390ww(h) which

provided:

The provisions of section 205(c) are and have been

applicable to all recordable contracts executed prior

to October 12, 1982 [the date of enactment of the

RRA], and any decision, rule, or reguiation promul-

gated by the Department of Interior to the contrary

is hereby revoked: Provided, That ... the Secretary

shall not seek reimbursement for any amount due

under this subsection or section 205(c) which was

due prior to the date of enactment of this subsection.

On June 10, 1988 Interior published Proposed Rule 1 1(i)(4)

(ii) to implement § 224(h) and overrule the old 11(i)(4). 53

Fed. Reg. 21,857 (1988). On January 17, 1989, the proposed

rule became Final Rule 1 1(i)(4)(ii), which provides:

For land under extended recordable contract owned

by prior law recipients, water deliveries shall be

made at the full-cost rate . .. commencing December

23, 1987, through the effective termination date of

the extended recordable contract.

43 C.F.R. § 426.11(i)(4)(i).

Shortly after § 224(h) was enacted, the appellants brought

a motion in the district court to enforce the judgment. They

argued that the judgment, in requiring the United States to

perform the contract, required Interior to sell water for excess

lands under extended-time contracts at the rate of $8.00 per

acre foot rather than at the full cost rate.of approximately

$42.00 that would be required by § 224(h). The motion was

essentially one for specific performance of the contract in

"

-A 13-

5834 BARCELLOS & WOLFSEN v. WESTLANDS WATER Dist.

accordance with the appellants’ understanding of the con-

tract. The appellants did not seek compensation for breach of

contract. They argued that § 224(h) did not apply to them. In

the alternative, they argued that if §224(h) did apply, it

impaired the contract and interfered with the judgment and

thus violated due process and the separation of powers

required by the Constitution.

The court denied the motion in a conclusory manner, with-

out explanation as to how it interpreted the judgment, the

underlying contracts, or the applicable statutes. Since all of

these interpretative questions are ones of law reviewable de

novo, L.K. Comstock & Co. v. United Engineers and Construc-

tors, Inc., 880 F.2d 219, 221 (9th Cir. 1989)(contract interpre-

tation); Keith v. Volpe, 784 F.2d 1457, 1461 (9th Cir. 1986)

(interpretation of consent decree); Vance v. Hegstrom, 793

F.2d 1018, 1022 (9th Cir. 1986)(statutory interpretation), we

decide the issues without remanding.

DISCUSSION

A. The Applicability of § 224(h)

The appellants’ initial argument is that § 224(h) does not

apply to them. They offer two theories for why this is so.

First, they argue that because their recordable contracts

were amended after October 12, 1982 to conform to the

requirements of § 209(e) of the Act,* they were not “executed”

prior to that date. And, the argument continues, § 224(h) pro-

vides that § 205(c) is applicable only to recordable contracts

“executed prior to October 12, 1982.” This argument has a

fundamental flaw. To read the phrase “executed prior to

October 12, 1982” to mean “executed prior to October 12,

1982 but not amended after October 12, 1982” would be to

*This argument would not help appellant O'Neill, who did not enter into

an amended recordable contract.

-A 14-

BARCELLOS & WOLFSEN Vv. WESTLANDS WaTER Dist. 5835

render the clause in §224(h) following that phrase

meaningless.® That clause states, “and any decision, rule, or

regulation to the contrary promulgated by the Department of

Interior to the contrary is hereby revoked.” The only deci-

sion, rule or regulation to the contrary, sormer 43 C.F.R.

§ 426.11(i)(4), provided that “land under a recordable con-

tract not subject to the discretionary provisions may continue

to receive water at the contract water rate for the extended

term of the contract.” (Emphasis added.) That extended term

derives from § 209(e), and it was pursuant to a regulation that

implemented § 209(e) that. the recordable contracts were

amended to incorporate the extended term. See 43 C.F.R.

§ 426.11(i)(3). These amendments could only have been

made, of course, after the October 12, 1982 date of the RRA’s

enactment. Thus, to read § 224(h) the way the appellants do

would impute to Congress an intent to exempt from a statute

that revokes a given regulation those persons who had been

virtually the only ones to whom the revoked regulation

applied. We do not impute to Congress an intent to engage in

an exercise in futility.”

[1] The appellants’ second argument why § 224(h) does not

apply to them is specious. They argue that since Congress was

aware of the Westlands controversy (having been presented

in a previous session with the opportunity to scuttle the 1986

Westlands settlement), the fact that the Westlands Water Dis-

trict was not mentioned by name in § 224(h) implies that

*This reading would also do violence to the plain language of § 224(h),

which does not distinguish between those contracts amended after their ini-

tial execution and those nct so amended.

©The legislative history of § 224(h) supports our conclusion. The confer-

ence report stated that the reason for enacting § 224(h) was that lands sub-

ject to recordable contracts executed prior to October 12, 1982 “have

already received irrigation water for ten years regardless of any extension

or suspension of the contract for purposes of disposal of excess lands.” H.R.

Conf. Rep. No. 495, 100th Cong., 2d Sess. 786. Those extensions or suspen-

sions were embodied in the very amendments that the appellants claim

exempt them from § 224(h).

-A 15-

5836 BARCELLOS & WOLFSEN Vv. WESTLANDS WATER Dist.

Congress intended to exempt landowners in the Westlands

District. Section 224(h) provides explicitly that § 205(c) is

applicable to “all” recordable contracts, not all except those

that Congress had reason to be aware of, and not, as the dis-

sent argues, all except those incorporated into judgments.

Section 224(h) clearly applies to the appellants.

At oral argument, counsel for the appellants conceded that

interpreting § 224(h) to exempt his clients was “stretching it.”

Appellants nonetheless rely on the canon that if a certain

reading of a statute raises “serious” constitutional questions,

a court should stretch to find a “fairly possible” alternative

construction that will avoid the questions. See Johnson v.

Robison, 415 U.S. 361, 366-67 (1974). This canon has its lim-

its; the court need not play the role of contortionist. There is

no fairly debatable construction of §224(h) that would

exempt the appellants from its provisions. Moreover, for rea-

sons discussed below, we do not believe that the constitu-

tional questions the appellants raise are sufficiently serious to

warrant invoking the canon in any event.

B. The Due Process/ Impairment of Contract Issue

Appellants argue that § 224(h) as applied to them deprives

them of property without due process in violation of the fifth

amendment by impairing the recordable contracts and the

District’s contract with Interior.

The fifth amendment prohibits the federal government

from depriving a person of “property without due process of

law.” In Lynch v. United States, 292 U.S. 571, 579 (1934), the

Supreme Court held that “[rJights against the United States

arising out of a contract with it” are property rights protected

from deprivation or impairment by the fifth amendment.”

"The Contract Clause of article I, § 10 prohibits states from impairing

contracts; the fifth amendment'’s prohibition against federal impairments is

not necessarily coextensive. See Pension Guaranty Corporation v. R.A. Gray

& Co., 467 U.S. 717, 732-33 (1984).

ae ee

-A 16-

BARCELLOS & WOLFSEN v. WESTLANDS WaTER Dist. 5837

In impairment of contract and due process cases involving

contracts, two somewhat different kinds of contracts have

been held to create contract rights protected by the constitu-

tion. In addition to traditional contracts, assented to in some

formal way by both parties, see Lynch, statutes themselves

have been treated as contracts, “when the language and cir-

cumstances evince a legislative intent to create private rights

of a contractual nature enforceable against the state.” United

States Trust Co. v. New Jersey, 431 U.S. 1, 17, n.13 (1977).

See also Indiana ex rel. Anderson v. Brand, 303 U.S. 95, 104-

05 (1938). The appellants do not claim that the 1982 Act and

regulations promulgated thereunder constitute a “contract”

impaired in 1987 by the passage of § 224(h). They claim only

that the District Contract and the recordable contracts, of

their own force, gave them rights that Congress allegedly took

away in enacting § 224(h).

To prevail in their claim that § 224(h) deprived them of

their contract right to water at $8.00 per acre foot for excess

lands receiving water for more than ten years, the appellants

must first, of course, demonstrate that they Aad such a con-

tract right before the enactment of § 224(h). See National R.

Passenger Corp. v. A.T. & S.F.R. Co., 470 U.S. 451 (1985). If

they can demonstrate they had such a right, they must then

show a substantial impairment of that right. See id. If no sub-

stantial impairment is shown, the inquiry ends. See id. In this

case, the inquiry ends after the first step. The appellants can-

not demonstrate that the right they claim is a right they are

entitled to by contract.

The appellants make the remarkable argument that, regard-

less of the reason for the landowner’s failure to sell, he is enti-

tled to subsidized water for as long as he owns his lands. They

argue that Article 8 of the recordable contracts compels this

conclusion. Article 8 provides:

None of the excess land ... shall be entitled to

receive water nor shall service be made available to

J re ee

-A 17-

5838 Barce.cos & WOLFSEN v. WESTLANDS WaTeR Dist.

such land pursuant to the District Contract, except

while owned by the Landowner, unless the same

shall have been sold to a person who [would be]

qualified as a nonexcess landowner to receive Proj-

Appellants argue that the statement, “None of the excess land

... Shall be entitled to receive water . . . except while owned

by the Landowner” is logically equivalent to the statement,

“While excess land is owned by the Landowner, he shall be

entitled to receive water.” We find this argument unpersua-

sive. The former statement plainly means that it is a necessary

condition for land to receive water that it be owned by the

Landowner who executed the recordable contract. The land-

owners assert that it is a sufficient condition. Appellants have

offered no evidence to support their interpretation; the plain

language of the contract is otherwise and accordingly con-

trols. We therefore reject the appellants’ argument that under

Article 8, the landowner’s mere ownership of excess lands

entitles him to Project water.

Thus far, we have determined only that Article 8 does not

answer the question of what rights, if any, are given by the

contracts to a landowner whose ten years has expired. Unfor-

tunately, no other provision of the contracts unequivocally

answers the question. Article 25 of the District Contract

comes closest. It provides:

(b) Each large landowner as a . . . condition prece-

dent to the right to receive water made available pur-

suant to this contract for any of his excess lands

shall:

(i) Before any water is furnished by the District

to his excess land, execute a valid recordable con-

tract, agreeing . . . to dispose of his excess land . . . to

@ persons who can take title thereto as nonexcess land

... at a price not to exceed the approved, appraised

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Barce.tos & WOLFSEN v. WeSTLANDS WaTer Dist. 5839

value of such excess land and within a period of ten

(10) years after the date of the execution of said

recordable contract[,] and agreeing further that if

said land is not so disposed of within ten (10) years,

the Secretary shall have the power to dispose of said

land at the appraised value ... on behalf of such

large landowner.

The Article makes a landowner’s entering into a recordable

contract, wherein he agrees to dispose of his excess lands

within ten years, a condition precedent to his right to receive

water pursuant to the contract. Appellants would have us

read the Article as providing that in order to receive water, a

landowner need only execute the contract and need not there-

after take the action required by the contract in order to con-

tinue receiving water. We reject such a wooden reading for

two reasons. First, it is unlikely that the parties intended or

expected that the landowners would make promises and not

attempt to perform them. Thus, although the condition pre-

cedent to receiving Project water is phrased in terms of the

landowner’s “agreeing” to dispose of his excess lands within

ten years, his failure to abide the agreement should be consid-

ered a breach of the condition in order to give the agreement

life. Second, it is doubtful that Interior's right to a power of

attorney was intended to be its exclusive remedy. The land-

owner's failure to sell as required by the contract should

relieve Interior of the obligation to provide water. If it were

otherwise, there would be little or no incentive for the land-

owner to sell within the prescribed period. The contract pro-

vides that the excess lands must be sold at a price determined

by appraisers according to a formula that discounts the true

market value of the lands by excluding the value of the water

rights. The landowner would thus have much to gain by delay

(continued cheap water) and little to lose (at most the right to

choose the identity of the person who would receive his

lands). Contract obligations ordinarily are mutual. There is

no reason to read this contract as an exception.

___ ___———-—sSSSsr;r:t:<‘<;7S; REPS:é<‘;P:t:é‘itS”

-A 19-

5840 Barcettos & WoLFSEN v. WESTLANDS WATER Dist.

Although the District Contract and recordable contracts do

not entitle a landowner to receive water for more than ten

years if he chooses not to sell his excess lands within that time,

it does not necessarily follow that a landowner who is /egally

precluded from selling his land in the manner provided by the

contracts should be deprived of Project water for an extended

time. As a result of the injunction against Interior owing to its

failure to comply with the APA, the appellants here were

legally precluded from selling their lands when their respec-

tive ten-year periods expired. We need not decide whether

Interior's non-compliance with the APA in its capacity as an

administrative agency should be chargeable to Interior in its

capacity as a commercial contractor and thus be considered

a breach of the water contracts."* For even if Interior

“breached” the District Contract and recordable contracts by

failing to comply with the APA, it does not follow that Inte-

rior is constitutionally compelled to provide the landowners

with the particular remedy they desire—eight dollar water for

as long as they own their lands.

[2] The landowners in this suit seek specific performance of

a contract that they argue entitles them to subsidized water

for as long as they own their lands. They do not seek compen-

satory damages resulting from Interior’s failure to process

excess land sales. If they were seeking such damages, relief

would be limited to losses they suffered as a result of not hav-

ing the opportunity to sell their land less the gains they reaped

from receiving $8.00 water for a period far longer than they

originally could have expected.” The question we face is thus

"*See Horowitz v. United States, 267 U.S. 458, 461 (1925) (noting that

“United States when sued as a contractor cannot be held liable for an

obstruction to the performance of the particular contract resulting from its

public and general acts as a sovercign.”)

“The landowners received water at the $8.00 rate for far more than ten

years, because Congress (and Interior) provided that there would be no

interruption of subsidized water while the moratorium on excess land sales

was in effect and for an additional eighteen months following the morato-

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BARCELLOS & WOLFSEN v. WESTLANDS WATER Dist. 5841

quite narrow: whether the appellants have a constitutionally-

protected contract right to the particular remedy they seek.

The appellants argue that Article 13 of the recordable con-

tracts entitles them to water at the contract rate for more than

ten years. Article 13 provides for a tolling of the ten year

period to sell excess lands if “water or service from the

Project” becomes unavailable during that time. The appel-

lants argue that “service” refers to the service of approving

excess land sales and that they are thus entitled by the contract

to additional time in which to dispose of their lands. Their

interpretation of the word “service” is unsupportable,” but

even if we accept their interpretation, Article 13 does not

entitle them to subsidized water.’* The appellants need to

rium. See RRA §§ 205(c), 224(h). The appellants have thus received subsi-

dized water for from 13 to 18 years, depending on when they executed their

recordable contracts. We note further that two of the appellants, Boston

Ranch and Westhaven Farming, never even attempted to sell their excess

lands. The third appellant, O’Neill did try to sell and subsequently brought

a successful suit in the Court of Claims for compensatory damages.

The interpretation is unsupportable for at least two reasons. First, even

if approving of land sales is a “service,” it certainly does not come “from

the Project,” and it is thus not the kind of service envisioned by Article 13.

Second, throughout the documents defining the relationship among the

landowners, the District, and Interior, “service” appears in contexts where

it clearly refers to the service of distributing water and providing drainage

facilities to recipients.

*5Section 209(e) of the RRA has the same effect on the contracts as the

appellants’ reading of the word “service,” and pursuant to § 209(e), the

recordable contracts were amended to provide the appellants with extra

time to dispose of their lands prior to the maturity of the Secretary's right

to invoke a power of attorney. The contracts were not, however, amended

to reflect former Interior Rule 1 1(iX4) providing for low cost water pricing.

Section 209%e) raises an interpretative problem similar to the problem

posed by Article 13: does it by implication provide additional time to

receive subsidized water?

It is ironic that the dissent, while purporting to find a plausible reading

of § 224(h) that would avoid constitutional questions, neglects to apply this

-A 21-

5842 BarceLtos & WOLFSEN v. WESTLANDS Water Dist.

show more than just their entitlement to own the excess lands

for more than ten years free of the Secretary’s power of attor-

ney; they need to show their entitlement to Project water

under the terms of the contract during that time.

Article 13, when properly construed, perhaps at most

implicitly provides for the converse relationship between

extended ownership and extended water rights. If a land-

owner were actually to suffer from a cut off of water through

no fault of his own, it is arguable that he would be entitled to

hold onto his lands for a long enough time to receive the bene-

fit that Article 13 seems intended to confer.

The primary benefit that the landowners receive from the

federal reclamation program is the privilege of receiving sub-

sidized water. Having to sell their excess lands within a lim-

ited period of time at an artificially low appraised price is an

intended burden.

When Congress passed the Reclamation Act of 1902, it had

two goals—to encourage family farming on modest-sized par-

cels and to increase agricultural output by subsidizing the irri-

gation of formerly arid and unproductive lands. See Jvanhoe

Irrig. Dist. v. McCracken, 375 U.S. 275 (1958); United States

v. Tulare Lake Canal Co., 535 F.2d 1093 (9th Cir. 1976).

Because the 1902 Act’s attempt to advance the first goal by

strictly limiting access to subsidized water to those who

owned fewer than 160 acres proved to interfere too much

with the second goal, Congress adjusted the balance by

amending the Act to authorize Interior to allow larger opera-

principle to § 209%(e), which is far more ambiguous than § 224(h). Section

209(e) was interpreted two different ways by Interior while the agency was

making rules under the RRA,,and Congress has seen fit to pass an amend-

ment clarifying its meaning. Aithough the dissent is correct that it would be

“parlous” to give controlling weight to decla: ations of one Congress’ intent

by a subsequent Congress, it is not parlous to find Congress’ subsequent

interpretation relevant to the question whether the previous Congress’ pro-

vision was ambiguous.

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BARCELLOS & WOLFSEN v. WESTLANDS WATER Dist. 5843

tors to receive water in exchange for their promise to divest

themselves of excess lands. See 43 U.S.C. § 423e.

Against this backdrop, Article 13’s guarantee to the land-

owner of subsidized water for the period of time during which

he lost that right makes good sense, since the essential benefit

to the landowner provided by the contract (and the Act) is

cheap water for the specified period of time. It does not follow

that in exchange for the temporary loss of the right to sell their

excess lands at an artificially low price, the landowners should

receive the right to additional years of cheap water. The statu-

tory and contractual scheme suggest that the right to subsi-

dized water is likely to be more valuable than the right to sell

lands; otherwise there would be no need to coerce the land-

owner to sell at the end of ten years—he would do it right

away.

Other than Article 13, the only contractual provision that

the appellants rely on to link ownership with entitlement to

subsidized water is Article 8, which we concluded did not so

entitle landowners.”*

[3] We have found no provision in either the District Con-

tract or the recordable contracts that provides that the right

to receive water on excess lands for more than ten years fol-

*The dissent argues that Paragraph 17.6 of the Judgment provides the

missing link between ownership of and entitlement to subsidized water.

But the dissent places too much emphasis on Paragraph 17.6. It provides:

“[T}he District shall not charge any water user more for water service or

Drainage Service than the charges required to be paid to the United States

fog such service, plus any [overhead expenses].” The dissent apparently

assumes that “the charges required to be paid to the United States” means

the contract rate of $8.00. But Paragraph 17.6 states only that the District

must charge the users the legally applicable rate and not attempt to profit

from its position as the “middleman.” The question we face in this appeal

is what the legally applicable rate is for users who have received subsidized

water for more than ten years. The dissent, in assuming that rate must be

the $8.00 contract rate, begs this question.

-A 23-

5844 BARCELLOS & WOLFSEN v. WESTLANDS WATER DisT.

lows from the right to own them for more than ten years. As

we have explained, the very structure of the statutory and

contractual scheme suggests otherwise.

The landowners’ argument that the contracts give them the

right to subsidized water for more than ten years thus finds no

support either in the language or in the underlying purpose of

the contracts. We agree with Interior that the 1963 Contract

simply does not provide for the unforeseen situation pres-

ented by the injunction against the approval of excess land

sales. When the ten-year periods expired, the parties had to

deal with the situation without explicit guidance from the

contract.’”

In a case where the government is charged by private indi-

viduals with breaching its own obligations in violation of the

Constitution, “[aJny ambiguity in the contract must operate

against the adventurer and in favor of the public.” Charles

River Bridge v. Warren Bridge, 36 U.S. 420, 544 (1837).

Because it was an unforeseen event—the injunction—that

prevented the contracts in this case from being performed as

planned by either party to them, it is not surprising that the

The dissent seems to assume that that Interior bears the burden of

proving that the contract does not entitle the landowners to more than ten

years of subsidized water. But as challengers to a congressional act, it is the

landowners who must prove the existence of the contract right they claim

the act has impaired. National R. Passenger Corp., 470 U.S. at 472.

18In Lynch, 292 U.S. at 579, the Court held that “when the United States

enters into contract relations, its rights and duties are governed generally by

the law applicable to private individuals.” The law applied is federal law,

Priebe & Sons v. United States, 332 U.S. 407, 411 (1947), which includes

the Charles River Bridge canon quoted in the text.

The Charles River Bridge rule is simply another way of stating that

“governmental contracts ‘should be construed, if possible, to avoid fore-

closing exercise of sovereign authority.’ ” Peterson v. Dept. of Interior, No.

87-2681, slip op. 2761, 2783 (9th Cir. March 14, 1990)\(quoting Bowen vy.

Agencies Opposed to Social Security Entrapment, 477 U.S. 41, 52 (1986)).

ssa

-A 24-

BARCELLOS & WOLFSEN v. WESTLANDS WATER Dist. 5845

contracts contained no explicit provisions governing the situ-

ation in which the parties found themselves.”®

[4] Although we hold that the District contract and the

appellants’ recordable contracts did not give them any

contractual right to receive more than ten years of subsidized

water, we do not, however, imply that they lacked any reason-

able expectation to receive the water for the extended period

of their recordable contracts. Interior’s December, 1983 regu-

lations created reasonable expectations that the landowners

would be able to receive subsidized water for the extended

period, but the regulations did not create constitutionally

protectable expectations. A legislature may repeal a statute

that created non-contractual expectations as long as there is

a rational basis for repeal. See U.S. Railroad Retirement

Board v. Fritz, 449 U.S. 166, 174 (1980). See also United

States v. Sperry Corp., 58 U.S.L.W. 4018 (Nov. 28, 1989). It

follows a fortiori that a repeal of regulations under that statute

is subject to no greater judicial scrutiny. The appellants do

not claim that § 224(h) fails the rational basis test.”

1°The dissent suggests that a remand might be in order for further factual

development of the contract interpretation question. We would not ordi-

narily quarrel with such a suggestion, but neither party offers any parol evi-

dence to help us interpret the documents at issue. Absent parol evidence,

appellate courts are in as good a position as trial courts to interpret docu-

mentary evidence.

2°Section 224(h) by its terms is self-executing and becomes effective

immediately upon enactment. The appellants claim that at a minimum

they were constitutionally entitled to a “grace period” after the enactment

of § 224(h) during which they could continue to receive subsidized water.

They rely on cases suggesting that when a legislature imposes a new condi-

tion on a person’s right to maintain ownership of tertain property, the legis-

lature must provide a sufficient period for the person to comply with the

condition. See United States v. Locke, 471 U.S. 84 (1985); Texaco, Inc. v.

Short, 454 U.S. 516 (1982). These cases do not govern the present case. In

this case, no property right is being conditioned on any particular behavior,

there is thus no need for a “grace period.”

-A 25-

5846 BaRCELLOS & WOLFSEN v. WESTLANDS WATER Dist.

[5] In sum, since we find that the appellants never had a

contractual right to receive more than ten yea.s of water for

their excess lands, Congress, in enacting § 224(h), did not

deprive them of a property right within the meaning of the

fifth amendment.

C. The Separation of Powers

[6] The appellant’s next claim is that, in addition to the con-

tracts, the stipulated judgment gave them vested rights which

Congress stripped them of in enacting § 224(h). They argue

that in so doing, Congress invaded the province of the judi-

ciary and violated the principle of separation of powers.

The fifty-six page judgment settled a great number of dis-

putes among the parties involved, concerning, among other

things, priorities among various users within the District,

drainage facilities, and the issues raised by the 1978 Krulitz

opinion. Nowhere does the judgment discuss the issue of the

price of water for excess lands under extended term contracts.

The judgment requires the United States to perform the 1963

District Contract, but as we have decided, that contract does

not govern the particular issue addressed by § 224(h).

The appellants argue that because at the time the parties

negotiated and entered into the judgment they assumed that

Interior Rule 11(i)(4) was a definitive interpretation of the

RRA, the judgment therefore incorporated that interpreta-

tion of the RRA and bound the parties to it. They argue that

reading the judgment to incorporate Interior’s rule would be

just, because, in reliance on that rule, they provided valuable

consideration in the form of forfeited claims.

We doubt that even if the parties had expressly

incorporated Interior’s rule into the judgment, they would be

entitled permanently to benefit from it were the law to

change. “The parties cannot, by giving each other consider-

ation, purchase from a court of equity a continuing injunc-

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BARCELLOS & WOLFSEN Vv. WESTLANDS WATER Dist. 5847

tion. ... The parties could not become the conscience of the

equity court and decide once and for all what was equitable

and what was not, because the court was not acting to enforce

a promise but to enforce a statute.” System Federation v.

Wright, 364 U.S. 642, 651-53 (1961). But the judgment does

not provide for terms such as those spelled out in Interior’s

former rule. All the judgment requires is for the 1963 Con-

tract to be performed. We have already held that § 224(h) is

not inconsistent with the 1963 Contract.

The appellants did not ask the district court to modify or

reopen its judgment in light of a purported change in the

law.”* They took the riskier but potentially more lucrative

step of claiming the change in law was an unconstitutional act

that interfered with the judgment. For the reasons stated

above, this claim cannot be sustained.

AFFIRMED.

FERNANDEZ, Circuit Judge, dissenting:

This case involves a major reclamation project.’ We are

called upon to determine whether the government has lived

up to the provisions of its contracts to supply project water to

the appellants. The majority says that it has. I disagree.

The reclamation laws are found in Chapter 12 of Title 43

of the United States Code. As they have existed since long

before the events that gave rise to this action, they provide for

the construction of reclamation projects and the allocation of

water from those projects. Reclamation projects are enor-.

21We do not imply that § 224(h), in overturning Interior’s regulation,

necessarily changed the law as Congress had intended it to be applied.

1A partial history can be found in California v. United States, 438 U.S.

645, 90 S. Ct. 2985, 57 L.Ed.2d 1018 (1978). It need not be reiterated here.

-A 27-

5848 BaRCELLOs & WOLFSEN v. WESTLANDS WATER Dist.

mous undertakings, and the law reflects that fact. Before a

project can be constructed, Interior must submit feasibility

reports to Congress. 43 U.S.C. § 485h(a). The reports must set

forth, among other things, an analysis of the cost of construc-

tion and an estimate of the portion of that cost “which can

properly be allocated to irrigation and probably be repaid by

the water users ....” 43 U.S.C. § 485h(a)(3).

The Secretary of the Interior (“Secretary”) had the author-

ity to enter into contracts with an appropriate organization

for the delivery of water which would ultimately be redeliv-

ered to others for use on the land itself. 43 U.S.C. § 485h(d).

An appropriate portion of the project construction costs was

to be allocated to the organization to which the water was

delivered, and spread over a period not to exceed 40 years. 43

U.S.C. § 485h(d). In lieu of that, the construction cost repay-

ment could be accomplished by entering into contracts to

supply water “at such rates as in the Secretary’s judgment”

will produce revenue sufficient to cover an appropriate share

of the maintenance and operating costs, and of fixed costs,

including a consideration of costs of construction. These

water supply contracts can last as long as forty years. 43

U.S.C. § 485h(e).

Congress also adopted the policy that reclamation projects

should not simply inure to the benefit of large landowners,

whether individual or corporate. It desired that those benefits

be spread more widely. It therefore decreed that before an

owner of over 160 acres could receive project water for the

excess lands, a recordable contract for the sale of those lands

would have to be entered into between the landowner and the

United States. 43 U.S.C. § 423e.

A. The Contracts.

It ultimately became apparent that the Jands which are

involved in this action, as well as other lands, would only be

properly irrigated if an irrigation project were created. With-

-A 28-

BARCELLOS & WOLFSEN v. WFSTLANDS WATER Dist. 5849

out a project, it was likely that even existing land would ulti-

mately return to desert, and it was clear that new land would

not be developed. See H. Rep. No. 399, 86th Cong., 2d Sess.

2-3, reprinted in 1960 U.S. Code Cong. & Ad. News 2209.

That realization led to the San Luis Unit Project, which was

approved in 1960. Pub. L. No. 86-488, 74 Stat. 156 (1960).

On June 5, 1963, the United States entered into a forty-year

contract with the District (“the 1963 contract”), in which it

was agreed that water from the project would be supplied to

the District. Paragraph 6 of the 1963 contract provided that

water would be supplied at the price of $8 per acre foot. That

included a $7.50 component for water service and a $.50

component for drainage service.* Paragraph 5 of the 1963

contract contemplated that the water would then be delivered

to land within the District.

There were, however, limitations, and one of those was that

the water would not be delivered to excess lands until the

landowners had executed recordable contracts with the

United States. Landowners had to agree that they would

either sell thei excess lands within ten years, or that the Sec-

retary would do so after that time through the use of a power

of attorney. Paragraphs 23, 24, and 25 of the 1963 contract.

As the law provided, the terms and conditions of any sale of

the excess lands was subject to the approval of the Secretary.’

43 U.S.C. § 423¢e.

?The price was intended to reimburse the government for its estimated

costs, and was not meant to be a mere giveaway figure. Indeed, we are told

that it was the highest price ever charged for water from a project of this

sort. Perhaps the Secretary estimated poorly, as contracting parties often

do; that should not affect our characterization of the arrangement.

31t is proper to note that the 1963 contract was not the result of some

arrangement made in the back corridors of an administrative agency that

was tricked into it by sly landowners. No one claims that it was. Quite the

contrary, it was heralded at the time it was made. In fact, the final approval

of the 1963 contract was the subject of a special ceremony at the White

House on January 28, 1963. See Remarks at Signing of Water Resources .

Development Contracts, John F. Kennedy, 1963 Pub. Papers 104. In other

words, there is no reason to treat the agreement with disrespect. r

-A 29-

5850 BARCELLOS & WOLFSEN v. WESTLANDS WaTER Dist.

Between 1969 and 1974 all of the appellants entered into

recordable contracts which conformed with the requirements

of the 1963 contract.

Notwithstanding the assertions of the majority, there is not

even a whisper of evidence that the contracts provided, or

were intended to provide, that contract-priced water would

be supplied to excess lands for a period of only ten years. One

searches the contracts in vain for that language. It simply is

not to be found. Instead, as already noted, it is contemplated

that landowners who enter into the required contracts will

receive water at the contract rate.

On its face, the 1963 contract provides that the District is

entitled to receive water at the contract rate through the year

2007. The clear contemplation of that contract is that the Dis-

trict will then redistribute that water to the lands entitled to

it, at a rate close to the contract price. This is confirmed by

paragraph 17.6 of the district court’s judgment of December

30, 1986. Non-excess agricultural lands are entitled to the

water at those rates. So too are excess lands, if the owners

have entered into recordable contracts. See 1963 contract,

23(a) (“No water made available pursuant to this contract

shall be furnished to any excess lands” unless owners execute

recordable contracts. Emphasis added). That applies to the

appellants in this case, and the 1963 contract does not further

restrict their rights.

It cannot be gainsaid that the appellants’ contracts required

them to sell their excess lands within ten years. Thereafter the

Secretary could exercise his power of attorney. However, nei-

ther the 1963 contract nor the recordable contracts them-

selves expressly provide for an adjustment in rates between

the time that the owner’s own disposition period ends and the

time that the Secretary exercises his power of attorney to sell

the lanes. From the end of the disposition period forward, the

lands are certainly subject to disposition by the Secretary, if

he has taken action. Many factors, including economic condi-

ee ee eT

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BARCELLOS & WOLFSEN v. WESTLANDS WATER Dist. 5851

tions, could cause that action to be delayed for a significant

period. In the case at hand, we know that for a very substan-

tial time the Secretary placed himself in a position where he

could not even approve sales by the owners themselves; other

kinds of delays are not difficult to imagine.

The lands remained thirsty throughout the delay time, and

appellants assert that the thirst was to be slaked with water

supplied at the 1963 contract price. Interior assumes that is

incorrect, but offers little explanation for its position. The

majority asserts that there is no explicit provision that water

will be supplied beyond the initial ten year period. It then

dubs that an ambiguity and resolves the ambiguity against the

appellants. I fail to see that as an ambiguity. What the con-

tract does provide is that water will be supplied at the contract

rate during the whole term of the contract. There is not a sin-

gle word limiting that. Just why the fact that the contracts ini-

tially contemplated that holders of excess lands would sell

them within ten years should be held to create an ambiguity

that must then be summarily resolved against the appellants

is not at all clear to me. I fail to see why a party must insist

upon having the right to water during the term of the contract

reiterated in order to avoid a later claim of ambiguity when

the other party decides that it did not make a good deal in the

first place.‘

Still, I agree with the majority’s apparent assumption that

“If there were truly an ambiguity, I would be dubious about resolving that

at our level and without the development of evidence in trial court proceed-

ings. See International Bhd. of Elec. Workers, Local 47, 880 F.2d 104, 107

(9th Cir. 1989). I do not believe that we could resolve it by simply relying

on a maxim that ambiguities operate against adventurers. For example,

there is a further maxim that ambiguous contract provisions are to be con-

strued against ihe drafter even if the drafter is the government. Kennewick

Irrigation Dist. v. United States, 880 F.2d 1018, 1033 (9th Cir. 1989) (citing

United States v. Seckinger, 397 U.S. 203, 215-16, 90 S. Ct. 880, 887-88, 25

L.Ed.2d 224 (1970)). Here the drafter of the excess lands provisions was

almost certainly the government.

-A 31-

5852 BARCELLOS & WOLFSEN v. WESTLANDS WATER Dist.

the appellants could breach their contract if they improperly

failed to sell during the time that they had io dispose of their

excess lands. Appellants recognize that under their recordable

contracts they were initially required to dispose of excess

lands within ten years after the date that the contracts were

entered into. They note that it was not possible to do so

because the Secretary stopped approving sales in 1976. That

is so, for the United States District Court for the District of

Columbia enjoined the Secretary and the Bureau of Reclama-

tion from approving any new contracts for the sale of excess

lands until approval criteria and procedures were adopted.

See National Land for People, Inc. v. Bureau of Reclamation,

417 F. Supp. 449 (D.D.C. 1976). The district court decision

was no mere bolt from the blue. It issued because the Secre-

tary had not bothered to follow the procedures that the

Administrative Procedure Act imposed upon him. That

brought sales of excess land to a halt, since no such proce-

dures were adopted for many years. In other words, the appel-

lants did not breach their agreements. If anyone breached, it

was the government. It refused to carry out its end of the

agreement that established the procedure for sale of the

excess lands. As the majority notes, “[c]ontract obligations

ordinarily are mutual.” Slip op. at 5839. The government did

not fulfill its part of the disposal bargain.

Nevertheless, the majority suggests that the Secretary can

profit from his own lack of performance by demanding that

appellants pay a higher price for water delivered to their

excess lands, since they did not sell these lands within ten

years. That is a most unusual result, and nothing in the con-

tracts or the law compels it. Had the appellants breached, one

could argue that the Secretary could sell the excess lands him-

self, or stop delivering water, or even, perhaps, refuse to

deliver water unless a higher price was paid. See United States

v. Quincy-Columbia Basin Irrigation Dist., 649 F. Supp. 487,

492 (E.D. Wash. 1986) (Secretary may withhold water from

users who fail to comply with reporting requirements). That

is not this case, and we need not ruminate about the Secre-

-A 32-

BARCELLOS & WOLFSEN v. WESTLANDS WaTER Dist. 5853

tary’s hypothetical remedies were it the case. Here it was the

Secretary who was in default.®

Congress recognized the problems that the Secretary’s dila-

tory conduct had caused. No doubt that is why RRA § 209(e)

[43 U.S.C. § 390ii(e)] allows extension of the period for dispo-

sition, an extension that the appellants embraced when they

entered into agreements with the United States to extend the

period during which they could dispose of their excess lands

without the direct intervention of the Secretary.

The majority’s approach frustrates the policy underlying

section 209(e). By enacting this provision, Congress conceded

that the 1976-1982 period ought not be counted within the

10-year disposition period. The Senate Report stated: “This

section provides for an extension of the 10-year time period

for disposal of excess lands subject to existing recordable con-

tracts which is equal to the period of time for which there has

been a moratorium on the approval of sales of such lands by

the Secretary of the Interior.” S. Rep. No. 373, 97th Cong., 2d

Sess. 15, reprinted in 1982 U.S. Code Cong. & Ad. News

2570, 2579. The policy behind RRA § 209 assures landown-

ers that they may have the benefit of a full ten years to dispose

of their land, during which time the Secretary will continually

be prepared to uphold his side of the agreements. The major-

ity notes that one could extend the time to dispose of the land

without extending the 1963 contract rate to that period. Slip

*The majority's suggestion that Interior did not default at all, because it

simply disabled itself from performing when it failed to pass regulations

that would enable it to do so is both intriguing and surprising. It opens up

tenebrous vistas of contractual perfidy. Horowitz v. United States, 267 U.S.

458, 45S. Ct. 344, 69 L. Ed. 736 (1925) is distinguishable. There one Board

agreed to ship goods, but another Board decreed that no one could ship that

general type of goods. The Supreme Court held that the plaintiff could not

claim a breach on the theory that a rule which bound everyone else should

not affect his contract. Our case is quite different. Here the Secretary had

to approve of sales and the Secretary failed to take proper steps to enable

himself to do so.

—-

-A 33-

5854 Barce_tos & WOLFSEN v. WESTLANDS WATER Dist.

op. at 5841-42. Of course one could. That position, however,

would not consider the economic effects of vastly increasing

the cost of water during that time.‘ It would not recognize that

the increase could turn a viable agricultural enterprise into a

losing proposition and, thus, punish the landowners for the

Secretary’s own default by preventing them from selling while

denying them contract-priced water. Appellants assert that

their added cost will be as much as $5,000,000.

In sum, it can be said that if the owners themselves refused

to sell their excess lands during the time that they had to dis-

pose of those lands, they would be in breach of their con-

tracts. However, there is no evidence that they would not be

entitled to the water before that point was reached. Here the

landowners could not be said to be in breach of their record-

able contracts, as long as the extended period set forth in

RRA § 209 [43 U.S.C. § 390ii] was applicable to them. At

least during that time, the judgment directed the United

States to perform the 1963 contract.

It is not necessary to decide whether appellants’ right to

water at the contract rate extends beyond the time that they

will be required to dispose of their lands under the existing

recordable contracts. There is no reason to assume that they

will not dispose of the lands in accordance with the terms of

those contracts. This court need not reflect upon appellants’

rights under the 1963 contract, as confirmed and enforced by

the December 30, 1986 judgment of the district court, should

they fail to do so.’

Therefore, at the time that Congress added section 224(h)

to the RRA [43 U.S.C. § 390ww(h)] appellants had an existing

*In this case, for example, the increase was over fivefold, $42 rather than

$8.

?The question of whether that failure would actually be a breach of con-

tract need not be mooted. Nor need we determine what the Secretary’s rem-

edies would be under that now hypothetical circumstance.

-A 34-

BARCELLOS & WOLFSEN Vv. WESTLANDS WATER Dist. 5855

contract right to receive water for their excess lands at the

1963 contract rate. More than that, they had a judgment

which directed that the District and the United States

“perform the 1963 Contract” (paragraph 4.1), and which fur-

ther ordered the District to deliver water to the landowners at

the price that it pays the United States, plus its overhead and

delivery costs (paragraph 17.6).

B. The 1987 Legislation; Separation of Powers.

Since the appellants did have contractual rights to receive

water, it is necessary to extend this dissent to a discussion of

the effect, if any, of section 224(h) [43 U.S.C. § 390ww(h)]*

upon those rights.

As already noted, by the time section 224(h) was enacted,

a judgment which directed the United States to abide by the

terms of the 1963 contract had been entered in this case. One

provision of that judgment made it clear that the water prices

were to pass through to the landowners in the District, and

nothing in the 1963 contract, the recordable contracts, or the

judgment states that excess lands were not entitled to receive

the benefits of that pricing.

The fact that the judgment was a consent judgment did not

change its essential character. It was still a judicial act; it was

as sacrosanct as if it had been entered after a full trial — no

more, no less. See System Fed’n No. 91 v. Wright, 364 U.S.

642, 650-51, 81 S. Ct. 368, 373, 5 L.Ed.2d 349 (1961); and

United States v. Swift & Co., 286 U.S. 106, 114-15, 52 S. Ct.

460, 462, 76 L.Ed. 999 (1932).

If in the face of the judgment requiring that the 1963 con-

tract be carried out Congress adopted a statute for the pur-

pose of overturning that result, we would be faced with a

* Although the section was not originally part of the RRA, it will hereafter

be referred to as RRA § 224(h).

-A 35-

5856 BaRCELLOS & WOLFSEN v. WESTLANDS WATER DIST.

serious constitutional problem. Congress would then have

“passed the limit which separates the legislative from the

judicial power.” United States v. Klein, 80 U.S. (13 Wall.)

128, 147, 20 L.Ed. 519 (1872). As the Court observed in

Pennsylvania v. Wheeling and Belmont Bridge Co., 59 U.S.

(18 How.) 421, 431,-15 L.Ed. 435 (1856):

[I]t is urged that the act of congress cannot have the

effect and operation to annul the judgment of the

court already rendered, or the rights determined

thereby in favor of the plaintiff. This, as a general

proposition, is certainly not to be denied, especially

as it respects adjudication upon the private rights of

parties. When they have passed into judgment the

right becomes absolute, and it is the duty of the court

to enforce it.

Were Congress to cross that line and attack a judgment that

had fixed the rights of the parties, it could trench upon the

powers of the judiciary in a manner unknown since the

Reconstruction Era problems that spawned Klein. A court

should be wary of an invitation to find that Congress has done

just that. Rather, it should approach the issues as other courts

have in the not far distant past.

In Daylo v. Administrator of Veterans’ Affairs, 501 F.2d 811

(D.C. Cir. 1974), the Administrator claimed that a statute

was intended to upset certain judgments which had become

final. The court noted that were the administrator correct, it

would be faced with a “serious constitutional dilemma.”

Daylo, 501 F.2d at 816. That was because the legislature sim-

ply lacks power to do such a thing, and “[a] contrary general

rule would subject all judicial action to superior legislative

review, a regime obviously inconsistent with due process of

law and subversive of the constitutional independence of the

judicial branch of government.” Jd. The court then went on to

note that the judicial branch will construe a statute to avoid

a finding of unconstitutionality if the statute can fairly bear

-A 36-

BARCELLOS & WOLFSEN v. WESTLANDS WATER Dist. 5857

that construction. Daylo, 501 F.2d at 819. The court then

added the following at page 819 of its Opinion:

Furthermore, where a statute lies in the shadow of

constitutional doubt, its proper construction will

usually require an exploration of legislative history.

[W]hen one interpretation of a statute

would create a substantial doubt as to the

statute’s constitutional validity, the courts

will avoid that interpretation absent a

“clear statement” of a contrary legislative

intent.

United States v. Thompson, 147 U.S. App. D.C. 1, 5,

452 F.2d 1333, 1337 (1971), cert. denied, 405 U.S.

998, 92 S. Ct. 1251, 31 L.Ed.2d 467 (1972).

A similar approach was taken by the district court in J.A.M.

Nat’l Pension Fund v. Wakefield Indus., Inc., 612 F. Supp. 643

(D.D.C. 1985). In that case, a defendant argued that amend-

ment of the statutes regarding withdrawal liability from

multi-employer pension plans had overturned a judgment

that determined liability in the case before the court. The

court noted the constitutional difficulty that would cause, but

after applying the Daylo approach it found that it was “both

reasonable and consistent to read this provision as excluding

any such liability that is reduced to final judgment.” J.A.M.,

612 F. Supp. at 647 (emphasis in original). It, therefore, had

no reason to find that an unconstitutional statute had been

adopted.

That is a proper approach to statutory construction. Nor

can it be said that the judgment in this case is the kind that

presents an exception to the general rule. The judgment was

not inherently subject to modification by Congress in light of

later events. This case is quite unlike Wheeling Bridge, 59

U.S. (18 How.) 421, where the Court had declared that a

-A 37-

5858 BARCELLOS & WOLFSEN v. WESTLANDS WATER Dist.

bridge was an obstruction to interstate commerce and had

ordered that it be removed. Congress could, and did, decide

that the bridge would not be in violation of past statutes, and

that it could be maintained in place. Since Congress was the

ultimate competent authority to decide whether a structure

would impede or facilitate commerce, it could hardly be said

that Congress was not able to do so. Rather, as the Court

noted, what used to be an obstruction in contemplation of the

law no longer was. The Court, instead, said it was “quite plain

the decree of the court cannot be enforced.” Wheeling Bridge,

59 U.S. (18 How.) at 432.

Similarly, in Hodges v. Snyder, 261 U.S. 600, 43 S. Ct. 435,

67 L.Ed. 819 (1923), the Court approved of legislation that

validated the consolidation of a school district after a prior

court order had enjoined it. There, too, the law had not pro-

vided for the consolidation, but after a court had made its

decree, the legislature closed that gap. The Court’s decision

clearly separated the two aspects of the issue as it was pres-

ented. As the Court said in Hodges, 261 U.S. at 603-04, 43 S.

Ct. at 436:

It is true that, as they contend, the private rights of

parties which have been vested by the judgment of a

court cannot be taken away by subsequent legisla-

tion, but must be thereafter enforced by the court

regardless of such legislation... .

This rule, however, as held in the Wheeling Bridge

Case, does not apply to a suit brought for the

enforcement of a pubiic right, which, even after it

has been established by the judgment of the court,

may be annulled by subsequent legislation and

should not be thereafter enforced; although, in so far

as a private right has been incidentally established

by such judgment, as for special damages to the

plaintiff or for his costs, it may not be thus taken

away.

-A 38-

_

BARCELLOS & WOLFSEN v. WESTLANDS WaTER Dist. 5859

Here we are not dealing with some public right that Congress

can change at will. We are dealing with a judgment arising out

of very specific contracts, and the only public aspect is that

the contracts were with the government. That aspect should

make the contracts even less subject to the vicissitudes of leg-

islation. See Perry v. United States, 294 U.S. 330, 55 S. Ct.

432, 79 L.Ed. 912 (1935); Lynch v. United States, 292 U.S.

571, 54S. Ct. 840, 78 L.Ed. 1434 (1934); The Sinking Fund

Cases, 99 U.S. 700, 25 L.Ed. 496 (1879). Cf Norman v. Balti-

more & O. R. Co., 294 U.S. 240, 55 S. Ct. 407, 79 L.Ed. 885

(1935). There is no reason to find that the judgment ordering

enforcement of the 1963 contract stands on shakier grounds.

Rather, this case is more like Daylo, 501 F.2d 811, and

1.A.M., 612 F. Supp. 643. Specific and valuable rights are

involved, and the judgment deserves enforcement. Applica-

tion of these principles to this case demonstrates that no con-

stitutional infirmity is shown.

There can be little doubt that RRA § 224(h) [43 U.S.C.

§ 390ww(h)] was intended to have an effect upon contracts

with the United States that existed before the date of its

enactment. Its explicit terms make that clear. In that regard,

it should be noted that the section refers to RRA § 205(c) [43

U.S.C. § 390ee(c)]. The latter section did specifically appear

to apply to pre-October 12, 1982 contracts, but RRA § 203(b)

[43 U.S.C. §390cc(b)] made it equally clear that section

205(c) was not applicableto those contracts unless the provi-

sions of section 203(a) or (c) were applicable. There can be no

doubt that the appellants in this case did not become subject

to those section 203 provisions. If there were a doubt, it has

been removed by the parties’ stipulation to the contrary.

While RRA § 224(h), which was added in 1987, did purport

to be a mere construction of the RRA adopted in 1982, it is

parlous indeed to determine the intention of the 97th Con-

gress on the basis of what the 100th Congress says that inten-

tion was. See Firestone Tire & Rubber Co. v. Bruch, — U.S. —,

109 S. Ct. 948, 956, 103 L.Ed.2d 80 (1989); United States v.

-A 39-

5860 BaRCELLOS & WOLFSEN v. WESTLANDS WaTER Dist.

Price, 361 U.S. 304, 313, 80 S. Ct. 326, 332, 4 L.Ed.2d 334

(1960); and United States v. United Mine Workers, 330 U.S.

258, 282, 67 S. Ct. 677, 690, 91 L.Ed. 884 (1947). The struc-

ture of the statute, its very clarity, makes it apparent that its

language must control at all times prior to the enactment of

‘RRA § 224(h). Of course, I do not say that Congress was

unable to amend the statute. Rather, I say that is precisely

what Congress did in 1987. By that amendment, it expressed

its intention that the RRA provisions for higher water rates

apply to individuals who had contracts which existed before

1982.° That being so, I must consider whether the legislation

also affected the judgment in this case. It did not.

As noted above, RRA § 224(h) was actually a part of the

Omnibus Budget Reconciliation Act of 1987, a not unusual

budgetary bill with a potpourri of provisions on various sub-

jects. It was a result of many compromises hammered out in

a conference committee of the United States Senate and the

United States House of Representatives. Neither bill that

went to that committee made any reference to this subject.

See H.R. 3545, 100th Cong., Ist Sess.’° I do not say this by

way of criticism; I say it by way of noting that there is no

material from which we could derive more precise knowledge

of legislative intent than the statute itself provides. Certainly

that history does not speak to the judgment in this case or to

any other judgment entered by the courts of the United

States.

*] need not and do not express an opinion on the propriety of legislation

which sets out to affect contract rights between the United States and oth-

ers. Suffice it to say that it presents knotty constitutional problems of its

own. See Perry v. United States, 294 U.S. 330, 55 S. Ct. 432, 79 L.Ed. 912

(1935); Lynch v. United States, 292 U.S. 571, 54S. Ct. 840, 78 L.Ed. 1434

(1934); and The Sinking Fund Cases, 99 U.S. 700, 25 L.Ed. 496 (1879).

The Senate version started as S. 1920, 100th Cong., Ist Sess., but what

it sent to the Conference Committee was a much changed version of H.R.

3545.

-A 40-

BARCELLOS & WOLFSEN v. WESTLANDS WaTER Dist. 5861

I recognize that we have been referred to remarks made by

Representative Miller at the time the Omnibus Budget Rec-

onciliation Act of 1987 was being considered. 133 Cong. Rec.

E4995-96 (daily ed. Dec. 22, 1987). His remarks are

interesting.’ However, they cannot change the construction

of the statute. First, it would be quite dangerous to ascribe the

opinions of Representative Miller to the whole Congress of

the United States, and thereby determine that body’s inten-

tion on this subject when it passed an enormous budgetary

act. Cf, Regan v. Wald, 468 U.S. 222, 237, 104 S. Ct. 3026,

3035, 82 L.Ed.2d 171 (1984). See also Green v. Bovk Laundry

Mach. Co., — US. —, 109 S. Ct. 1981, 1994, 104 L.Ed.2d 557

(1989) (Scalia, J., concurring). Second, even Representative

Miller did not expressly state that there was an intent to over-

turn any judgment of a court which had fixed the rights of the

parties.

I would therefore hold that Congress did not intend to

affect the judgment in this case when it enacted RRA

§ 224(h), and that the enactment of that section did not vio-

late the constitutional provisions which allocate powers

between the branches of government.” I would also eschew

Representative Miller provided the following rationale in support of

the bill:

[Tjhe Department, as is far too often the case in its mismanage-

ment of the reclamation program, bowed to heavyhanded lobby-

ing and allowed large landowners in California to receive a

windfall worth tens of millions of dollars.

... [T)his windfall surely ranks as one of the most egregious

giveaways in the history of the reclamation program. This bill will

end that giveaway by clearly curtailing the subsidies and saving

taxpayers tens of millions of dollars that the administration was

prepared to give away.

2The majority seems to suggest that this conclusion is little more than

resolution of a claimed statutory ambiguity in the usual sense. See slip op.

at 5841-42 n.15. I disagree. As the authorities cited in this portion of the

dissent indicate, great clarity of purpose should appear before we attribute

the intent to overturn judicial decrees to Congress. That is quite different

from simply construing a statute to determine whether it applies to a cer-

tain set of facts.

-A 41-

5862 BarCeLLos & WOLFSEN v. WESTLANDS WaTER Dist.

the Secretary’s interpretation of that statutory language inso-

far as he has attempted to apply it to these appellants. While

I am aware of the fact that we should usually give deference

to administrative interpretations, we do not do so if the inter-

pretations are in conflict with the law. See Public Employees

Retirement Sys. v. Betts, _ U.S. —, 109 S. Ct. 2854, 2863, 106

L.Ed.2d 134 (1989). That is particularly true where, as here,

the interpretations would raise serious doubts about the con-

stitutionality of the statute itself. See Daylo, 501 F.2d 811,

and J.A.M., 612 F. Supp. 643.

It follows that the appellants were entitled to receive water

at the rate set forth in the 1963 contract, without regard to the

provisions of RRA § 224(h). Moreover, they should not be

subject to the provisions of RRA § 205 [43 U.S.C. § 390ee]

during the period that they have been given to dispose of their

excess lands pursuant to their existing recordable contracts,

unless they take action to bring themselves within those pro-

visions in the manner provided in RRA § 203 [43 U.S.C.

§ 590cc]. As I have already noted, we need not decide whether

that right extends beyond the time that they would be

required to dispose of their lands under the existing record-

able contracts.

When these contracts were entered into the appellants had

every reason to expect an irenic future in which their labor

would combine with ample, reasonably-priced water to pro-

duce bountiful crops. That future was not to be. The Secre-

tary’s various acts have caused delay, litigation, and greatly

increased water prices for a portion of appellants’ lands. I

would not permit the government to thus break faith with the

appellants. I would hold it to its contracts.

For these reasons I must respectfully dissent.

APPENDIX B

-B l-

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

BARCELLOS and WOLFSEN, INC., et al.,

Plain .iffs,

and

BOSTON RANCH COMPANY;

EDWIN R. O’NEILL; WEST HAVEN

FARMING CGO.,

Plaintiffs - Appellants,

v.

WESTLANDS WATER DISTRICT, et al.,

Defendants,

and

UNITED STATES DEPARTMENT OF INTERIOR,

Defendant - Appellee.

No. 89-15098

DATE OF ENTRY: JUNE 7, 1990

ORDER

The panel as constituted above has voted unanimously

to deny the petition for rehearing.

The opinion filed March 16, 1990 is amended by

adding the following paragraph to footnote 18 of the

opinion:

The Charles River Bridge rule is

simply another way of stating that

“governmental contracts ‘should be

construed, if possible, to avoid fore-

closing exercise of sovereign autho-

rity.’ ” Peterson v. Dept. of Interior,

No. 87-2681, slip op. 2761, 2783 (9th

Cir. March 14, 1990) (quoting Bowen

: -B 2-

v. Agencies Opposed to Social Secu-

rity Entrapment, 477 U.S. 41, 52

(1986)).

The full court has been advised of the above amend-

ment and the suggestion for rehearing en banc and no ~

judge of the court has requested a vote. Fed. R. App. P.

35(b).

The petition for rehearing is denied and the sugges-

tion for rehearing en banc is rejected.

ri og

ORIGINAL

FILED

AUG 10 1988

Clerk, U.S. District Court

Eastern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

BARCELLOS AND WOLFSEN, INC.,

et al.,

Plaintiffs,

Vv.

WESTLANDS WATER DISTRICT,

et al.,

Defendants.

AND RELATED CROSS-ACTIONS.

CV F-79-106 EDP

Consolidated With:

CV F-81-245 EDP

MEMORANDUM DECISION RE:

MOTION TO ENFORCE JUDGMENT

The above-entitled ligitation had its origins in the

repudiation by the Secretary of the Interior, of a certain

water contract between the Bureau of Reclamation and

the Westlands Water District, which the parties entered

into in 1965.

The factual background leading up to that litigation is

as follows. In 1963, the Westlands Water District

(hereafter the “District”) entered into a water service

2

contract with the Department of Interior (hereafter ‘

“Interior”). The contract provided that beginning in

1979 (the 16th year of the contract), Interior would

provide 783,000 acre feet of water at $8.00 per acre foot,

(see Articles 2(d) and 6(a)), plus a service component of

not more than 50¢ for the interceptor drain and $7.50 for

the water service component.

Article 23a of the contract provides in pertinent part:

LAND NOT TO RECEIVE WATER FUR-

NISHED TO DISTRICT BY UNITED STATES :

UNTIL OWNERS THEREOF EXECUTE

CERTAIN CONTRACTS

23. (a) No water made. available pursuant

to this contract shall be furnished to any excess

lands as defined in Article 25 hereof unless the

owners thereof shall have executed valid

recordable contracts in form prescribed by the

United States, agreeing to the provisions of this

article and Articles 24 and 25 of this contract,

agreeing to the appraisal provided for in Article

24 hereof and that such appraisal shall be made

on the basis of the actual bona fide value of

such lands at the date of the appraisal without

reference to the construction of the Project, all

as hereinafter provided, and agreeing to the sale

of such excess lands under terms and condi-

tions satisfactory to the Secretary and at prices

not to exceed those fixed as hereinafter pro-

vided. No sale of any excess lands shall carry

the right to receive water made available

pursuant to this contract unless and until the

purchase price involved in such sale is ap-

proved by the Contracting Officer and upon

proof of fraudulent representation as to the true

sess

consideration involved in such sales the United

States may instruct the District by written

notice to refuse to furnish any water subject to

this contract to the land involved in such

fraudulent sales, and the District thereafter

shall not furnish said water to such lands until

such written notice is withdrawn.

The use of the term “valid recordable contracts” in the

foregoing article should be noted.

Article 24 of the 1963 contract contains the provi-

sions for the sale of excess lands.

Article 25 of the 1963 contract defines excess lands as

acreage in excess of 160 acres “held in the beneficial

ownership of one person”.

Article 25(i) provides that if the landowner has not

disposed of the lands within 10 years, the Secretary shall

have the power to do so “subject to the same conditions

on the part of the landowner”.

The decision by an official that the 1963 agreement

was invalid, together with Interior’s demand that the

District pay a higher rate for water, triggered this

litigation. ;

The litigation was ended by the parties entering a

Stipulated judgment, which provided in pertinent part:

This judgment shall govern the rights and

duties of all parties for its term commencing

the first day of the month following entry of

this judgment and terminating on December 31,

2007, except as provided in paragraph 13.3

below and Exhibit “K” to this judgment.

1 An examination of paragraph 13.3 and the Exhibit “K” attached

to the judgment, reveals that neither the paragraph nor document has

affected the termination of the judgment.

yw Ye

As part of the Omnibus Budget Reconcilation [sic]

Act (PL100-203, section 502) Congress provided in

pertinent part as follows:

(h) The provisions of section 205(c) are and

have been applicable to all recordable contracts

executed prior to October 1982 and any deci-

sion, rule, or regulation promulgated by the

Department of the Interior to the contrary is

hereby revoked: Provided, That notwithstand-

ing the provisions of subsection (i), the Secre-

tary shall not seek reimbursement for any

amounts due under this subsection cr section

205(c) which was due prior to the date of

enactment of his [sic] subsection.

(i) When the Secretary finds that any indi-

vidual or legal entity subject to reclamation

law, including this Act, has not paid the re-

quired amount for irrigation water delivered to

a landholding pursuant to reclamation law,

including this Act, he shall collect the amount

of any underpayment with interest accruing

from the date the required payment was due

until paid. The interest rate shall be determined

by the Secretary of the Treasury on the basis of

the weighted average yield of all interest

bearing marketable issues sold by the Treasury

during the period of underpayment.

Pursuant to this legislative mandate, the Bureau of

Reclamation, as the operating agency, has billed certain

landowners situated in the Westlands Water District

substantial amounts of money representing the alleged

underpayment due from said landowners for water

delivered after the effective date of the judgment.

Certain of the affected landowners have filed the instant

motions to enforce the judgment and to prevent the

collection of said amounts.

<4.

The government’s response is that the judgment does

not refer to the amount that the excess lands are to pay

for water.

Rule 70 of the Federal Rules of Civil Procedure

provides that:

If a judgment directs a party to execute a

conveyance of land or to deliver deeds or other

documents or to perform any other specific act

and the party fails to comply within the time

specified, the court may direct the act to be

done at the costs of the disobedient party by

some other person appointed by the court and

the act when so done has like effect as if done

by the party. On application of the party

entitled to performance, the clerk shall issue a

writ of attachment or sequestration against the

property of the disobedient party to compel

obedience to the judgment. The court may also

in proper cases adjudge the party in contempt.

If real or personal property is within the dis-

trict, the court in lieu of directing a conveyance

thereof may enter a judgment divesting the title

of any party and vesting it in others and such

judgment has the effect of a conveyance exe-

cuted in due form of law. When any order or

judgment is for the delivery of possession, the

party in whose favor it is entered is entitled to a

writ of execution or assistance upon application

to the clerk.

As was pointed out supra, the stipulated judgment

consisted not only of the judgment itself, but also the

various exhibits attached hereto.

The parties have not presented the Court with an

exhaustive review of the negotiations leading to this

judgment. However, the Court, in its capacity as the

monitor of this litigation, was aware that it was long and

-C6-

protracted. The Court is also aware that Congress was

given an oversight function with regard to this judgment,

i.e., that Congress was given a specified number of days

to object to the judgment. No objections were lodged.

A review of the judgment reveals its completeness.

Paragraph 5 of the judgment provides for the types of

action that may be employed to enforce the judgment.

The moving parties, who were members of the class

engaged in the original litigation, have employed one

of the alternative methods mandated in Paragraph 5,

and are “parties” as per the definition contained in Para-

graph 1.

In raragraph 4 of the judgment, the parties have

agreed, and the Court has ordered, that the terms of the

1963 contract be performed. As pointed out above, the

1963 contract provided a water rate for excess lands

governed by a recordable contract at variance with the

rate being charged.

On January 21, 1971, Boston Ranch, one of the

moving parties, executed recordable contracts covering

23,575 excess acres. In 1973 and 1974, West Haven

executed five (5) recordable contracts resulting in 5,406

acres of excess lands. The remaining party, O’Neill,

recorded his contracts in 1969 and 1970 covering his 948

acres of excess lands. The 10-year period, which origi-

nally was the outer limits of time during which excess

lands could receive reclamation water at a reduced rate,

has long since expired.” However, after the judgment

and/or until the enactment of section 502 of the Omnibus

2 Congress, in its passage of the Reclamation Act of 1982,

provided for the tolling of the 10-year period for the sale of excess

lands. See 43 USC § 390ii(e). Whether the recordable contracts

held by the moving parties are covered by this provision, or al-

ternately, not effected, is a fact question. Since there is no evidence

before the Court on this issue, the Court cannot resolve it.

-C7- ‘

Reconcilation [sic] Act, Interior had delivered water for f

the use on excess and non-excess lands at the same rate, i

i.e., $8.00 per acre feet.

In 1982, Congress issued 43 USC section 390cc

which provides: ‘

New of amended contracts.

(a) The provisions of this title shall be applica-

ble to any district which —

(1) enters into a contract with the Secretary |

subsequent to the date of enactment of this Act i

[enacted Oct. 12, 1982]; i

(2) enters into any amendment of its con- |

tract with the Secretary subsequent to the date }

of enactment of this Act [enacted Oct. 12, ;

;

{

1982] which enables the district to receive

supplemental or additional benefits; or

(3) which amends its contract for the pur- i

pose of conforming to the provisions of this t

title.

(b) Any district which has an existing contract

with the Secretary as of the date of enactment .

of this Act [enacted Oct. 12, 1982] which does

not enter into an amendment of such contract as

specified in subsection (a) shall be subject to

Federal reclamation law in effect immediately

prior to the date of enactment of this Act

[enacted Oct. 12, 1982], as that law is amended

or supplemented by sections 209 through 230

of this title [43 USCS § 390ii-390zz-1]. Within

a district that does not enter into an amendment

of its contract with the Secretary within four

and one-half years of the date of enactment of

this Act [enacted Oct. 12, 1982], irrigation

water may be delivered to lands leased in

excess of a landholding of one hundred and

a ae

-C8-

sixty acres only if full cost, as defined in

section 202(3)(A) of this title [43 USCS

§ 390bb(3)(A)], is paid for such water as is

assignable to those lands leased in excess of

such landholding of one hundred and sixty

acres; Provided, That the interest rate used in

computing full cost under this subsection shall

be the same as provided in section 205(a)(3)

[43 USCS § 390ee(a)(3)].

(c) In the absence of an amendment to a

contract, as specified in subsection (a), a

qualified recipient or limited recipient may

elect to be subject to the provisions of this title

by executing an irrevocable election in a form

approved by the Secretary to comply with this

title. The district shall thereupon deliver irri-

gation water to and collect from such recipient,

of the credit of the United States, the additional

charges required by this title and assignable to

the recipient making the election.

A careful reading of the foregoing provisions in-

dicates a clear intention by Congress to have all con-

tracts and/or water recipients comply with the 1982

Reclamation Act. This was to be done by the water

district servicing the recipient entering into amended

contracts, or in the case of recipients, by executing an

irrevocable election to be bound by the terms of the

amendments contained in the 1982 Act. Presumably,

being within a contracting district satisfies the require-

ment.

The issue before the Court is this: did the District

amend its existing contract (i.e., the 1963 Contract) by

the Stipulated Judgment? Or alternately, was the Stipu-

lated Judgment an attempt to defeat the Congressional

policy as announced in the 1982 revisions to the Federal

-C9-

Reclamation law? A different analysis is necessary

depending upon how that question is answered.

A quick perusal of the 1982 Reclamation Act in-

dicates that Congress has not directly addressed the

problem confronting the Court in this case, i.e., at what

rate are excess lands created by pre-October 12, 1982

recordable contracts entitled to receive water. 43 USC

section 390ee demonstrates a clear intention by Congress

that excess lands shall pay the full cost of water. The

closest that Congress comes to addressing this subject is

43 USC section 390ee(b) and (c), which provide as

follows:

(b) Any contract with a district entered into by

the Secretary as specified in section 230 [43

USCS § 390cc], shall provide for the delivery

of irrigation water to lands not in excess of the

landholdings described in subsection (a) upon

terms and conditions related to pricing estab-

lished by the Secretary pursuant to Federal

reclamation law in effect immediately prior to

the date of enactment of this Act [enacted

Oct. 12, 1982], or in the case of an amended

contract, upon the terms and conditions estab-

lished by such contract prior to the date of its

amendment. However, the portion of any price

established under this subsection which relates

to operation and maintenance charges shall be

established pursuant to section 208 of this title

[43 USCS § 390hh].

(c) Notwithstanding any extension of time of

any recordable contract as provided in section

209(e) of this title [43 USCS § 390ii(e)], lands

under recordable contract shall be eligible to

receive irrigation water at less than full cost for

a period not to exceed ten years from the date

such recordable contract was executed by the

-C 10-

Secretary in the case of contracts existing prior

to the date of enactment of this Act [enacted

Oct. 12, 1982], or five years from the date such

recordable contract was executed by the Secre-

tary in the case of contracts entered into subse-

quent to the date of enactment [enacted Oct. 12,

1982], or the time specified in section 218 [43

USCS §390rr] for lands described in that

section: Provided, That in no case shall the

right to receive water at less than full cost

under this subsection terminate sooner than

eighteen months after the date on which the

Secretary again commenced the processing or

the approval of the disposition of such lands.

(Oct. 12, 1982, P. L. 97-293, Title II, § 205, 96

Stat. 1265.)

Subsection (b) is a clear statement of Congressional

pricing policy relative to reclamation water. Subsection

(c), on the other hand, is not at all clear — did Congress

intend to limit, absolutely, the right of excess land to

receive reclamation water at the reduced rate to 10 years

and no more? It should be noted that the 10-year figure

was formerly used in conjunction with such lands, i.e.,

the date upon which they had to be sold.? A sale of the

lands, of course, could end the excess/non-excess prob-

lems for the selling landowner. Hence, the use of the

; 43 USC section 390ee(b) and (c) are a departure from prior law.

Previously, the statutory scheme, roughly speaking, was to allow the

sale of water at reclamation rates if the recipient signed a recordable

contract agreeing to sell the land at the end of 10 years at a price that

reflected an increase in value due to the irrigation. This requirement

was tampered with by Congress and the bureaucrats for a variety of

reasons. 43 USC section 390ce(b) and (c) represent the first time

that Congress may have used the 10-year period in a different

manner, i.e., to determine the absolute time limit that excess lands

could receive water at less than full cost.

-Cil-

10-year period in other sections would be of no help in

deducing the intention of Congress in the new Act.

A review of the Congressional record is likewise

nonproductive. Congress did turn its attention to the

provisions in 43 USC section 390¢ee as follows:

Section 7(a)(2). — This section prohibits the

delivery of irrigation water to excess lands

which are, or are capable of, receiving irri-

gation water as of the date of enactment of

S. 1867, unless disposal of such lands is re-

quired by a recordable contract or the owners

of such lands have requested that a recordable

contract be executed.

Section 7(b). — This section requires that

the period for disposal of excess lands not

exceed 10 years.

Section 7(c). — Under this section land-

owners may only amend their existing

recordable contracts to reflect the new acreage

limitations of S. 1867.

Section 7(d). — This section provides that

excess lands which are sold by the Secretary

by power of attorney after expiration of the

10-year recordable contract period (which is a

procedure of existing law) shall be sold only to

qualified recipients and by impartial selection

of buyers. No authority is granted to apply

such restrictions to sales made by owners

within the 10-year recordable contract period.

The Committee intends that excess land will

continue to be appraised and sold at a price that

does not reflect the value of the availability of

irrigation water from the Federal project.

Improvements made which are unrelated to

irrigation water deliveries would be included in

-C12-

the fair market value, including such improve-

ments as have been made for water delivery

which are not related to irrigation water made

available from a reclamation project; for

example, groundwater pumps and delivery

systems.

Section 7(e). — This section provides for an

extension of the 10-year time period for dis-

posal of excess lands subject to existing

recordable contracts which is equal to the

period of time for which there has been a

moratorium on the approval of sales of such

lands by the Secretary of the Interior.

See 3 U.S. Code Congressional and Administrative

News — 97th Congress, Second Session 1982, 2570 et

seq.

These excerpts, on the other hand, would indicate that

Congress did not think that it was changing the law.

The parties have not addressed the issue discussed by

the Court above. Plaintiffs’ brief consists of a broadside

of constitutional and other principles that do not help the

Court. The government’s position that the judgment

doesn’t address the problem is equally wide of the mark.

The Court finds that the parties have standing to make

the motion. However, the Court has not been furnished

with the necessary information to solve the problem.

Defendant’s motion is denied without prejudice.

DATE: August 9, 1988.

/s/ Edward Dean Price

EDWARD DEAN PRICE

United States District Judge

-C 13-

ORIGINAL

FILED

DEC 8 1988

Clerk, U.S. District Court

Eastern District of California

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF CALIFORNIA

BARCELLOS AND WOLFSEN,

INC., et al.,

Plaintiffs,

v.

WESTLANDS WATER DISTRICT,

et al.,

Defendants.

AND RELATED CROSS-ACTIONS.

WESTLANDS WATER DISTRICT,

Plaintiffs-in-Consolidation,

v.

UNITED STATES OF AMERICA,

et al.,

Defendants-in-Consolidation,

AND RELATED CROSS-ACTIONS.

CV F-79-106 EDP

Consolidted [sic] With:

CV F-81-245 EDP

-C 14-

ORDER DENYING MOTION

TO ENFORCE THE JUDGMENT

The Court has previously denied moving parties’

motion to enforce a stipulated judgment in this case

without prejudice.

In its prior memorandum decision, the Court outlined

the factual background of this motion. However, the

Court did not emphasize that the settlement consisted of

reaffirming the 1963 contract and certain agreements

amending the same. Although given the opportunity to

do so, Congress did not object to the agreement or any

part thereof.

Neither counsel has addressed or even commented on

the new provisions that have been added to 43 C.F.R.

part 426.

43 C.F.R. 426.1 announces that one of its objectives

is to insure that the Federal Government receive the full

cost of providing water to landholdings which exceed

established limits.

43 C.F.R. 426.2(c) provides:

Sections 426.5 through 426.12 of these

regulations apply variously to all districts

subject to the acreage limitation and full-cost

provisions of Reclamation law. The way in

which they apply depends upon whether the

district has (1) a contract which was in force

on October 12, 1982, (2) a contract which was

amended after October 12, 1982, or (3) a

contract which was entered into after October

12, 1982.

Application of these sections will also vary

depending upon whether an individual or entity

subject to Reclamation law has made an ir-

revocable election to conform to the discretion-

-C 15-

ary provisions of the Reclamation Reform Act

of 1982.

43 C.F.R. 426.4(b) provides:

The term ‘contract’ means any repayment or

water service contract between the United

States and a district providing for the payment

of construction charges to the United States

including normal operation, maintenance, and

replacement costs pursuant to Federal Recla-

mation law. All water service and repayment

contracts are considered contracts even if the

contract does not specifically identify that

portion of the payment which is to be attributed

to operation and maintenance and that which is

to be attributed to construction.

43 C.F.R. 426.4(dd) provides:

The term ‘recordable contract?’ means a

written contract between the Secretary and a

landowner capable of being recorded under

State law, providing for the sale or disposition

of land held by that landowner in excess of the

ownership limitations of Federal Reclamation

law.

43 C.F.R. 426.5 differentiates among contracts in

force on October 12, 1982, new contracts entered into

after October 12, 1982, and amended contracts. This

section further provides certain mandatory provisions

that must be included in either new contracts or amend-

ments to existing contracts. Neither counsel has ad-

dressed whether the stipulated judgment in this case was

either a new contract or an amendment to an existing

contract.

43 C.F.R. 426.4 makes a further distinction between

amendments to contracts which provide additional or

supplemental benefits, and those that do not so provide.

-C 16-

Different provisions must be included in each type of

contract.

It should be noted that in 43 C.F.R. 426.11(i){1), the

Secretary of Interior mandated that:

Westlands Water District, California. Begin-

ning July 10, 1984, the Secretary again com-

menced processing the sales of excess land

under recordable contract in the Westlands

Water District, California. Such land will be

allowed a period of time equal to the time

remaining on that recordable contract on

August 13, 1976, to sell land under recordable

contract. The Secretary will notify the affected

landowners as to applicable dates.

No party to this lawsuit has addressed the issue as to

whether the Stipulated Judgment was a new contract, an

amendment to an existing contract, or none of the above.

Further, the validity of the agreements underlying the

judgment in view of the 1982 amendments to the

Reclamation Act, have not been addressed. The federal

defendant’s flat statement that the judgment does not

apply to plaintiffs’ present complaints hardly solves the

problem.

The Court notes that on June 10, 1988, the Depart-

ment of Interior published its proposed rules to comply

with the Omnibus Budget Reconciliation Act of 1987,

enacted on December 22, 1987. These rules appear in 53

Federal Register 21857-01. Some of the rules cited

above are included in the proposed amendments. The

subject matter of the relief that the moving parties seek

in this matter may be addressed in these rules. Coun-

sel’s attention is directed thereto.

Finally, and most important, the Congress of the

United States was not a party defendant/signatory to the

judgment in question. The complained of action is an

<€11-

action by Congress, and must be judged independent of

the provisions of the judgment and appended agree-

ments. To ask this Court to enforce the judgment as

against the federal defendants named in the action would

pit one agency of the federal government against the

other without having the affected branch before the

Court.

On reconsideration, it is the decision of the Court that

the plaintiff’s motion to enforce the judgment is denied.

DATED: December 7, 1988.

/s/ Edward Dean Price

EDWARD DEAN PRICE

United States District Judge

APPENDIX D

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UNITED STATES CONSTITUTION

U.S. CONST. art. I, §1

All legislative Powers herein granted shall be vested

in a Congress of the United States, which shall consist of

a Senate and House of Representatives.

U.S. CONST. art. III, §§ 1 and 2

Section 1. The judicial Power of the United States,

shall be vested in one supreme Court, and in such in-

ferior Courts as the Congress may from time to time

ordain and establish. The Judges, both of the supreme

and inferior Courts, shall hold their Offices during good

Behavior, and shall, at stated Times, receive for their

Services, a Compensation, which shall not be diminished

during their Continuance in Office.

Section 2. The judicial Power shall extend to all

Cases, in Law and Equity, arising under this Constitu-

tion, the Laws of the United States, and Treaties made,

or which shall be made, under their Authority; — to all

Cases affecting Ambassadors, other public Ministers and

Consuls; — to all Cases of admiralty and maritime

Jurisdiction; — to Controversies to which the United

States shall be a Party; — to Controversies between two

or more States; — between a State and Citizens of

another State; — between Citizens of different States, —

between Citizens of the same State claiming Lands under

Grants of different States, and between a State, or the

Citizens thereof, and foreign States, Citizens or Subjects.

In all Cases affecting Ambassadors, other public

Ministers and Consuls, and those in which a State shall

-D2-

be Party, the supreme Court shall have original Jurisdic-

tion. In all other Cases before mentioned, the supreme

Court shal) have appellate Jurisdiction, both as to Law

and Fact, with such Exceptions, and under such Regula-

tions as the Congress shall make.

The Trial of all Crimes, except in Cases of Impeach-

ment, shall be by Jury; and such Trial shall be held in

the State where the said Crimes shall have been com-

mitted; but when not committed within any State, the

Trial shall be at such Place or Places as the Congress

may by Law have directed.

U.S. CONST. amend. V

No person shail be held to answer for a capital, or

otherwise infamous crime, unless on a presentment or

indictment of a Grand Jury, except in cases arising in the

land or naval forces, or in the Militia, when in actual

service in time of War or public danger; nor shall any

person be subject for the same offense to be twice put in

jeopardy of life or limb; nor shall be compelled in any

criminal case to be a witness against himself, nor be

deprived of life, liberty, or property, without due process

of law; nor shall private property be taken for public use,

without just compensation.

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SECTION 9%e)

RECLAMATION PROJECT ACT OF 1939,

ch. 418, 53 Stat. 1193;

43 U.S.C. § 485h (e)

In lieu of entering into a repayment contract pursuant

to the provisions of subsection (d) of this section to

cover that part of the cost of the construction of works

connected with water supply and allocated to irrigation,

the Secretary, in his discretion, may enter into either

short- or long-term contracts to furnish water for irriga-

tion purposes. Each such contract shall be for such

period, not to exceed forty years, and at such rates as in

the Secretary’s judgment will produce revenues at least

sufficient to cover an appropriate share of the annual

operation and maintenance cost and an appropriate share

of such fixed charges as the Secretary deems proper, due

consideration being given to that part of the cost of

construction of works connected with water supply and

allocated to irrigation; and shall require payment of said

rates each year in advance of delivery of water for said

year. In the event such contracts are made for furnishing

water for irrigation purposes, the costs of any irrigation

water distribution works constructed by the United

States in connection with the new project, new division

of a project, or supplemental works on a project, shall be

covered by a repayment contract entered into pursuant to

subsection (d) of this section.

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SECTION 46

OMNIBUS ADJUSTMENT ACT OF 1926,

ch. 383, 44 Stat. 649;

43 U.S.C. § 423(e)

No water shall be delivered upon the completion of

any new project or new division of a project 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 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 settlement 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 with the United States in promot-

ing the settlement of the projects or divisions after

completion and in the securing and selecting of settlers.

Such contract or contracts with irrigation districts

hereinbefore referred to shall further provide that all

irrigable land held in private ownership by any one

owner in excess of one hundred and sixty irrigable acres

shall be appraised in a manner to be prescribed by the

Secretary of the Interior and the sale prices thereof fixed

by the Secretary on the basis of its actual bona fide value

at the date of appraisai without reference to the proposed

construction of the irrigation works; and that no such

<.

excess lands so held shall receive water from any project

or division if the owners thereof shall refuse to txecute

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 the Interior; and that until one-half the

construction charges against said lands shall have been

fully paid no sale of any such lands shall carry the right

to 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 representation

as to the true consideration involved in such sales the

Secretary of the Interior is authorized to cance! the water

right attaching to the land involved in such fraudulent

sales: Provided, however, That if excess land is acquired

by foreclosure or other process of law, by conveyance in

satisfaction of mortgages, by inheritance, or by devise,

water therefor may be furnished temporarily for a period

not exceeding five years from the effective date of such

acquisition, delivery of water thereafter ceasing until the

transfer thereof to a landowner duly qualified to secure

water therefor: 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 maintenance 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.

APPENDIX G

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SECTION 203(b)

RECLAMATION REFORM ACT OF 1982,

Pub. L. 97-293, 96 Stat. 1265;

43 U.S.C. § 390cc (b) (first sentence)

Any district which has an existing contract with the

Secretary as of October 12, 1982, which does not enter

into an amendment of such contract as specified in

subsection (a) of this section shall be subject to Federal

reclamation law in effect immediately prior to October

12, 1982, as that law is amended or supplemented by

sections 209 through 230 of this title [43 U.S.C.A.

$§ 390ii to 390zz-1, 373a, 422¢, 425b, 485h).... '

SECTION 209(e)

RECLAMATION REFORM ACT OF 1982,

Pub. L. 97-293, 96 Stat. 1268;

43 U.S.C. § 390ii (e)

In the event that the owner of any lands in excess of

the ownership limitations of Federal reclamation law has

heretofore entered into a recordable contract with the

Secretary for the disposition of such excess lands and

has been prevented from disposing of them because the

Secretary may have withheld the processing or approval

of the disposition of the lands (whether he may have

been compelled to do so by court order or for other

reasons), the period of time for the disposal of such

lands by the owner thereof pursuant to the contract shall

be extended from the date on which the Secretary again

commences the processing or the approval of the dis-

position of such lands for a period which shall be equal

to the remaining period of time under the recordable

contract for the disposal thereof by the owner at the time

the decision of the Secretary to withhold the processing

or approval of such disposition first became effective.

-G2-

SECTION 205(c)

RECLAMATION REFORM ACT OF 1982,

Pub. L. 97-293, 96 Stat. 1266;

43 U.S.C. $390¢e (c)

Notwithstanding any extension of time of any

recordable contract as provided in section 390ii(e) of

this title, lands under recordable contract shall be eligi-

ble to receive irrigation water at less than full cost for a

period not to exceed ten years from the date such

recordable contract was executed by the Secretary in the

case of contracts existing prior to October 12, 1982, or

five years from the date such recordable contract was

executed by the Secretary in the case of contracts en-

tered into subsequent to October 12, 1982, or the time

specified in section 390rr of this title for lands described

in that section: Provided, That in no case shall the right

to receive water at less than full cost under this subsec-

tion terminate sooner than eighteen months after the date

on which the Secretary again commences the processing

or the approval of the disposition of such lands.

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FORMER INTERIOR RULE 11(i)(4) (1983);

FORMER 43 CFR § 426.11(i)(4) (1983)

Land under recordable contract which is held by a

water user not subject to the discretionary provisions of

title II may continue to receive irrigation water at the

contract water rate for the extended term of the contract,

except as provided in section 426.11(e). Land under

recordable contract which is held by a qualified or

limited recipient may continue to receive irrigation water

deliveries at the contract rate for the original disposition

period of the recordable contract. The water rate for.

land under recordable contract held by a qualified or

limited recipient during an extended contract period

shall be determined as follows: The contract water rate

shall apply until the date 18 months after the date the

Secretary resumes the processing of excess land sales, or

until the extended contract period expires, whichever

occurs first, and after the date 18 months from the date

the Secretary resumes the processing of excess land

sales, water deliveries shall be made at full cost for the

duration of the extended contract period.

APPENDIX I

‘to

SECTION 5302

OMNIBUS BUDGET RECONCILIATION

ACT OF 1987,

Pub. L. 100-203, 101 Stat. 1330-268 to 1330-269;

adding inter alia § 224(h)

Reclamation Reform Act,

43 U.S.C. § 390ww (h)

SEC. 5302. RECLAMATION REFORM ACT AMEND-

MENTS.

(a) AUDIT. — Section 224 of the Reclamation

Reform Act of 1982 (Public Law 97-293) is amended by

adding the following new subsections after subsection

(f):

“(g) In addition to any other audit or compliance

activities which may otherwise be undertaken, the

Secretary of the Interior, or his designee, shall conduct a

thorough audit of the compliance with the reclamation

law of the United States, specifically including this Act,

by legal entities and individuals subject to such law. At

a minimum, the Secretary shall complete audits of those

legal entities and individuals whose landholdings or

operations exceed 960 acres within 3 years. The Secre-

tary shall submit an annual written report to the Senate

Committee on Energy and Natural Resources and the

House Committee on Interior and Insular Affairs. Such

report shall summarize the legal entities and individuals

audited, the results of such audits, and the actions taken

by the Secretary to correct any instances of noncom-

pliance with the reclamation law.

“(h) The provisions of section 205(c) are and have

been applicable to all recordable contracts executed prior

to October 12, 1982, and any decision, rule, or regula-

tion promulgated by the Department of the Interior to the

contrary is hereby revoked: Provided, That notwith-

sag.

standing the provisions of subsection (i), the Secretary

shall not seek reimbursement for any amounts due under

this subsection or section 205(c) which was due prior to

the date of enactment of this subsection.

“(i). When the Secretary finds that any individual or

iegal entity subject to reclamation law, including this

Act, has not paid the required amount for irrigation

water delivered to a landholding pursuant to reclamation

law, including this Act, he shall collect the amount of

any underpayment with interest accruing from the date

the required payment was due until paid. The interest

rate shall be determined by the Secretary of the Treasury

on the basis of the weighted average yield of all interest

bearing marketable issues sold by the Treasury during

the period of underpayment.”.

(b) REVOCABLE TRUSTS. — Section 214 of the

Reclamation Reform Act of 1982 (Public Law 97-293) is

amended by inserting “(a)” after “214” and by adding

the following new subsection at the end thereof:

“(b) Lands placed in a revocable trust shall be

attributable to the grantor if —

“(1) the trust is revocable at the discretion of the

grantor and revocation results in the title to such

lands reverting either directly or indirectly to the

grantor; or

“(2) the trust is revoked or terminated by its

terms upon the expiration of a specified period of

time and the revocation or termination results in the

title to such lands reverting either directly or indi-

rectly to the grantor.”.

J

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Sir

CURRENT INTERIOR RULE 11(i)(4) (1989);

43 CFR §426.11(i)(4) (1989)

(4) Water rates for land under extended recordable

contracts. Land under recordable contract may continue

to receive irrigation water deliveries at the non-full-cost

rate for the original disposition period of the recordable

contract. The rate for irrigation water deliveries to land

under recordable contract during the extended contract

period shall be determined as follows:

(i) For land under recordable contract owned by

qualified and limited recipients, the non-full-cost rate.

shall apply until the date 18 months after the date the

Secretary resumes the processing of excess land sales, or

until the extended contract period expires, whichever

occurs first, and after the date 18 months from the date

the Secretary resumes the processing of excess land

sales, water deliveries shall be made at the full-cost rate

through the effective termination date of the extended

recordable contract.

(ii) For land under extended recordable contract

owned by prior law recipients, water deliveries shall be

made at the full-cost rate described in § 426.7(f)(1)

commencing December 23, 1987, through the effective

termination date of the extended recordable contract.

APPENDIX K

~Ri-«-

SELECTED EXCERPTS OF JUNE 5, 1963

CONTRACT BETWEEN THE

UNITED STATES AND

WESTLANDS WATER DISTRICT

PROVIDING FOR WATER SERVICE

THIS CONTRACT, made this 5th day of June,

1963, in pursuance generally of the Act st of June 17, 1902

(32 Stat. 388), and acts mandatory thereof or supple-

mentary thereto, all collectively hereinafter referred to as

the Federal reclamation laws, betw sen THE UNITED

STATES OF AMERICA, hereinafter referred to as the

United States, and the WESTLANDS WATER DIS-

TRICT, hereinafter referred to as the District, a political

subdivision of the State of California, duly organized,

existing, and acting pursuant to the laws thereof, with its

principal place of business in Fresno, California,

WITNESSETH, That:

EXPLANATORY RECITALS

WHEREAS, the United States is constructing and

operating the Federal Central Valley Project for the

purpose, among others, of furnishing water for irriga-

tion, municipal, domestic, and other beneficial uses; and

WHEREAS, the United States is constructing the

San Luis Unit of the Federal Central Valley Project

which will be operated and used, in part, for the furnish-

ing of water to the District pursuant to the-terms of this

contract; and

WHEREAS, the United States is providing an

interceptor drain designed to meet the drainage require-

ments of the San Luis Unit of the Federal Central Valley

Project; and

ee

WHEREAS, investigations of the District lands and

present water supply indicate that irrigated and irrigable

lands within the boundaries of the District are at present

in need of additional water for irrigation and certain

areas have a potential need of water for irrigation, that

ground water underlying the District is seriously de-

pleted and in need of replenishment, and that an addi-

tional water supply to meet these present and potential

needs can be made available by and through the works

constructed and to be constructed by the United States;

and

WHEREAS, the District desires to contract, pur-

suant to the Federal reclamation laws and the laws of the

State of California, for the furnishing by the United

States of a supplemental water supply from the Project

and for drainage service by means of the interceptor

drain for which the District will make payment to the

United States upon the basis, at the rate, and pursuant to

the conditions hereinafter set forth; and

WHEREAS, investigations of the streamflow in the

Sacramento River, the Trinity River, the American

River, the San Joaquin River, and their tributaries

indicate that there will be available for furnishing to the

District from the San Luis Unit an additional water

supply for surface diversion and direct application for

irrigation and directly or indirectly to replenish depleted

ground waters underlying the District;

NOW, THEREFORE, in consideration of the mutual

and dependent covenants herein contained, it is hereby

mutually agreed by the parties hereto as follows:

2s.

DEFINITIONS

1. When used herein, unless otherwise distinctly

expressed, or manifestly incompatible with the intent

hereof, the term:

(a) “Secretary” or “Contracting Officer”,

shall mean the Secretary of the United States

Department of the Interior or his duly author-

ized representative:

(b) “Project” shall mean the Federal Central

Valley Project, California, of the Bureau of

Reclamation;

(c) “San Luis Unit” shall mean the facilities

constructed pursuant to the Act of June 3, 1960

(74 Stat. 156);

(d) “interceptor drain” shall mean _ the

physical works constructed by the United

States pursuant generally to the Act of June 3,

1960 (74 Stat. 156), in order to meet the drain-

age requirements of the area served by the San

Luis Unit which have been calculated to be one

hundred and fifty thousand (150,000) acre-feet

per year at a maximum rate of flow of two

hundred and fifty (250) cubic feet per second.

Such physical works shall not include those

facilities necessary for the collection, convey-

ance, and discharge of drain water for disposal

by the interceptor drain;

(e) “initial delivery date” shall mean the

date announced by the Contracting Officer

when water from the San Luis Unit first will be

available for furnishing by the United States

pursuant to this contract;

(f) “year” shall mean the period January 1

through December 31;

yas

(g) “newly irrigated land” shall mean land

that has not produced an irrigated crop during

the five (5) years immediately previous to the

initial delivery date;

(h) “agricultural use” shall mean use of

water primarily in the commercial production

of agricultural crops or livestock including

domestic use incidental thereto on tracts of land

operated in units of two (2) acres or more.

TERM OF CONTRACT

2. This contract shall be effective on the date first

hereinabove written and shall remain in effect for a

period of forty (40) years commencing with the year in

which the earliest initial delivery date of the long-term

contracts for water service from the San Luis Unit shall

occur: Provided, That if within five (5) years commenc-

ing with the year in which the initial delivery date of this

contract occurs the District has not constructed distribu-

tion facilities of adequate capacity to serve all of the

irrigable lands of the District, this contract shall at the

option of the Contracting Officer terminate on the last

day of December in said 5th year, except that if such

facilities are under construction at the end of said period

the Contracting Officer may, at his option, extend said

period from year to year to permit completion of said

facilities: Provided further, That under terms and

conditions mutually agreeable to the parties hereto,

renewals of this contract for furnishing water for agricul-

tural use may be made for successive periods not to

exceed forty (40) years each. The terms and conditions

of each renewal shall be agreed upon not later than one

(1) year prior to the expiration of the then existing

contract: And provided further, That upon written

request by the District of the Secretary not later than one

-K5-

(1) year prior to the expiration of this contract, when-

ever, account being taken of the amount then credited to

the costs of construction of water supply works allocated

to irrigation, the remaining amount of costs so allocated

which is properly assignable for ultimate return by the

District as established by the Secretary of the Interior

pursuant to (3) of Section 1 of Public Law 643 (70 Stat.

483) probably can be repaid to the United States within

the term of a contract under subsection (d), Section 9 of

the 1939 Reclamation Project Act (53 Stat. 1187), this

contract for the furnishing of water for agricultural use

may be converted to a contract under said subsection (d)

upon terms and conditions mutually agreeable to the

United States and the District.

WATER TO BE FURNISHED TO DISTRICT

— USE OF INTERCEPTOR DRAIN

3. (a) Each year for a period of five (5) years,

commencing with the year in which the initial delivery

date occurs, the United States shall furnish to the Dis-

trict and the District each such year shall accept and pay,

as provided in Article 6 hereof, for water from the San

Luis Unit in the quantities specified in the schedule or

any revision thereof submitted by the District in accor-

dance with subdivision (a) of Article 4 hereof for each

such year: Provided, That the United States shall not be

obligated to furnish more than one million eight thou-

sand (1,008,000) acre-feet of water during any such

year.

(b) Commencing with the 6th year and continuing

through the 15th year the United States shall furnish to

the District and the District shall accept and pay for, as

provided in Article 6 hereof, four hundred -nousand

(400,000) acre-feet of water annually: Provided, That

the District may at any time or times during the period

Ré-

described by this subdivision, by written notice

furnished to the United States in advance, increase the

quantity of water the United States shall furnish to the

District and the District shall accept and pay for annu-

ally during said period, but in no event shall said annual

quantity for the 6th year through the year 1979 exceed

one million eight thousand (1,008,000) acre-feet and for

the period commencing with the year 1980 and extend-

ing through the 15th year exceed seven hundred and

eighty-three thousand (783,000) acre-feet plus such

additional quantity as may be determined pursuant to

subdivision (c) hereof. At any time during said period,

the submission and approval of a schedule or any revi-

sion thereof pursuant to subdivision (a) of Article 4

hereof for water in excess of the quantity the District is

required to accept and pay for during that year shall

constitute such a written notice.

(c) The maximum of seven hundred and eighty-

three thousand (783,000) acre-feet of water to be fur-

nished to the District pursuant to subdivisions (b) and

(d) hereof has been computed on the premise that be

eliminating overdraft a safe yield of two hundred and

twenty-five thousand (225,000) acre-feet of water of

usable quality will be available each year for pumping

w.thin the District from the deep waderground beneath

what is generally referred to as the Corcoran clay at an

estimated average depth of three hundred (300) feet.

Prior to January 1, 1980, the United States and the

District by joint studies shall review the validity of this

estimate based on conditions existing after the initial

delivery date._In the event, as a result of such joint

studies, the parties determine upon a safe yield in a

quantity less than two hundred and twenty-five thousand

(225,000) acre-feet, the quantity of water to be furnished

annually to the District pursuant to subdivisions (b) and

(d) hereof shall then be increased by the difference

-K7-

between said yield of two hundred and twenty-five

thousand (225,000) acre-feet and the safe yield as

determined by the joint studies: Provided, however,

That such increase shall not exceed one hundred and

seventeen thousand (117,000) acre-feet.

(d) Commencing the 16th year and each year

thereafter during the remainder of the term of this

contract, the United States shall furnish to the District

for use on its eligible lands and the District shall accept

and pay for, as provided in Article 6 hereof, seven

hundred and eighty-three thousand (783,000) acre-feet of

water plus such additional quantity as may be deter-

mined pursuant to subdivision (c) hereof. If in any year

during such period the District is unable to so use any

part of such total quantity of water, the United States

and the District by mutual agreement may reduce, by a

quantity equal to that which the District was unable to so

use, the quantity of water which the United States is

obligated to furnish and the District is obligated to

accept and pay for during the remainder of the term of

this contract.

(e) If in any year after the Contracting Officer has

approved a schedule or any revision thereof submitted

by the District the United States is unable to furnish any

portion of the water in the quantities and at the times

requested in the schedule and the District does not elect

to receive and does not receive such water at other times

during such year, the District shall be entitled to an

adjustment as provided in Article 7.

(f) The right to the beneficial use of water fur-

nished to the District pursuant to the terms of this

contract and any renewal hereof shall not be disturbed so

long as the District shall fulfill all of its obligations

under this contract and any such renewal.

(g) Drainage facilities of the District constructed

in accordance with Article 13 hereof may be connected

-K8-

to the interceptor drain in such capacity and at such

locations as may be mutually agreed upon between the

District and the United States.

***

RATE AND METHOD OF PAYMENT FOR

WATER — DRAINAGE SERVICE

6. (a) Before December 15 of each year the Contract-

ing Officer shall notify the District in writing of the rate

of payment to be made by the District for water which

the District is required to accept and pay for during the

ensuing year pursuant to the provisions of Article 3

hereof. The rate so announced may not be in excess of

Eight Dollars ($8) per acre-foot and shall include a

drainage service component of not to exceed Fifty Cents

($0.50) for the interceptor drain and a water service

component of not to exceed Seven Dollars and Fifty

Cents ($7.50). The United States shall notify the Dis-

trict in writing when the interceptor drain becomes

available for service. The drainage service component

shall be included in the rate of payment beginning with

the year following the date the District is notified that

such service is available.

(b) The District shall make payments to the

United States each year at the rate fixed as provided in

subdivision (a) of this article for the quantity of water

which the District is required to accept and pay for

during such year pursuant to the provisions of Article 3

hereof. The District shall pay one-half (1/2) of the

amount payable for said water to be furnished for the

year before January 1 and shall pay the remainder of the

amount payable for said water at the time the quantity of

water furnished to the District equals the quantity for

which payment has been made but in no event later than

-K9-

July 1 or such other later date or dates of the respective

year as may be specified by the Contracting Officer in a

written notice to the District. Water requested by the

District in excess of the quantity it is required to accept

and pay for that year shall be paid for in full at the time

or times such requests are made.

(c) In the event the District is unable, fails, or

refuses to accept delivery of the quantities of water

available for delivery to and required to be accepted by

it pursuant to this contract, or in the event the District in

any year during the periods described in subdivisions (b)

and (d) of Article 3 hereof fails to submit a schedule for

delivery as provided in subdivision (a) of Article 4

hereof, said inability, failure, or refusal shall not relieve

the District of its obligation to pay for such water and

the District agrees to make payment therefor in the same

manner as if said water had been delivered to and ac-

cepted by it in accordance with this contract.

*_**

AGREED CHARGES A GENERAL OBLIGA-

TION OF THE DISTRICT — TAXABLE

LAND

14, The District as a whole is obligated to pay to the

United States the charges becoming due as provided in

this contract notwithstanding the default in the payment

to the District by individual water users of assessments,

tolls, or other charges levied by the District. The lands

which may be charged with any taxes or assessments

under this contract are hereby designated and described

as all the lands in the District.

-K 10-

ALL BENEFITS CONDITIONED UPON PAYMENT

15. Should any assessment or assessments required

by the terms of this contract and levied by the District

against any tract of land or water user in the District and

necessary to meet the obligations of the District

hereunder be judicially determined to be irregular or

void, or should the District or its officers be enjoined or

restrained from making or collecting any assessments

upon such land or from such water user as provided for

herein, then such tract shall have no right to any water

furnished to the District pursuant to this contract, and no

water made available by the United States pursuant

hereto shall be furnished for the benefit of any such

lands or water users, except upon the payment by the

landowner of his assessment or a toll charge for such

water, notwithstanding the existence of any contract

between the District and the owner or owners of such

tract. Contracts, if any, between the District and the

water users involving water furnished pursuant to this

contract shall provide that such use shall be subject to

the terms of this contract. It is further agreed that the

payment of charges at the rate and upon the terms and

conditions provided for herein is a prerequisite to the

right to the use of water furnished to the District pur-

suant to this contract, and no irregularity in levying

taxes or assessments by the District nor lack of authority

in the District, whether affecting the validity of District

taxes or assessments or not, shall be held to authorize or

permit any water user of the District to demand water

made available pursuant to this contract unless charges

at the rate and upon the terms and conditions provided

for herein have been paid by such water user.

-K1l-

LAND NOT TO RECEIVE WATER FUR-

NISHED TO DISTRICT BY UNITED STATES

UNTIL OWNERS THEREOF EXECUTE

CERTAIN CONTRACTS

23. (a) No water made available pursuant to this

contract shall be furnished to any excess iands as defined

in Article 25 hereof unless the owners thereof shall have

executed valid recordable contracts in form prescribed

by the United States, agreeing to the provisions of this

article and Articles 24 and 25 of this contract, agreeing

to the appraisal provided for in Article 24 hereof and

that such appraisal shall be made on the basis of the

actual bona fide value of such lands at the date of the

appraisal without reference to the construction of the

Project, all as hereinafter provided, and agreeing to the

sale of such excess lands under terms and conditions

satisfactory to the Secretary and at prices not to exceed

those fixed as hereinafter provided. No sale of any

excess lands shall carry the right to receive water made

available pursuant to this contract unless and until the

purchase price involved in such sale is approved by the

Contracting Officer and upon proof of fraudulent repre-

sentation as to the true consideration involved in such

sales the United States may instruct the District by

written notice to refuse to furnish any water subject to

this contract to the land involved in such fraudulent

sales, and the District thereafter shall not furnish said

water to such lands until such written notice is

withdrawn.

(b) If Project water furnished to the District

pursuant to this contract reaches the underground strata

of excess land owned by a large landowner, as defined in

subdivision (a) or Article 25 hereof, who has not exe-

cuted a recordable contract and the large landowner

' pumps such Project water from the underground, the

-K12-

District will not be deemed to have furnished such water

to said lands within the meaning of this contract if such

water reached the underground strata of the aforesaid

excess land as an unavoidable result of the furnishing of

Project water by the District to nonexcess lands or to

excess lands with respect to which a recordable contract

has been executed.

VALUATION AND SALE OF EXCESS LANDS

24. (a) The value of the excess irrigable lands within

the District held ifi private ownership of large lana-

owners as defined in the next succeeding article hereof,

for the purposes of this contract, shall be appraised in a

manner to be prescribed by the Secretary. At the option

of a large landowner, however, the value of such land

may be appraised, subject to the approval thereof by the

Secretary, by three appraisers. One of said appraisers

shall be designated by the Secretary and one shall be

designated by the District and the two appraisers so

appointed shall name the third. If the appraisers so

designated by the Secretary and the District are unable to

agree upon the appointment of the third, the Presiding

Justice of the Fifth District Court of Appeal of the State

of California shall be requested to designate the third

appraiser.

(b) The following principles shall govern the

appraisal:

(i) No value shall be given such lands

on account of the existing or prospective

possibility of securing water from the Project;

(ii) The value of improvements on the

land at the time of said appraisal shall be

included therein, but shall also be set forth

separately in such appraisal.

-K 13-

(c) The excess land or any large landowner shall

be reappraised at the instance of the United States or at

the request of said landowner. The cost of the first two

appraisals of each tract of excess land shall be paid by

the United States. The cost of each appraisal thereafter

shall be paid by the party requesting such appraisal.

(d) Any improvements made or placed on the

appraised land after the appraisal hereinabove provided

for prior to sale of the land by a large landowner shall be

appraised in like manner.

(e) Excess irrigable lands sold by large land-

owners within the District shall not carry the right to

receive water made available pursuant to this contract

for such lands and the District agrees to refuse to furnish

such water to lands so sold until, in addition to com-

pliance with the other provisions hereof, a verified

statement showing the sale price upon any such sale

shall have been filed with the District and said sale price

is not in excess of the appraised value fixed as provided

herein.

(f) The District agrees to take all reasonable

steps requested by the Contracting Officer to ascertain

the occurrence and conditions of all sales of irrigable

land of large landowners in the District made subsequent

to the execution of this contract and to inform the United

States concerning the same.

(g) A true copy of this contract, of each

recordable contract executed pursuant to this article and

Articles 23 and 25 hereof, and of each appraisal made

pursuant thereto shall be furnished to the District by the

United States and shall be maintained on file in the

office of the District and like copies in such offices of

the Bureau of Reclamation as may be designated by the

Contracting Officer and shall be made available for

examination during the usual office hours by all persons

who may be interested therein.

—

-K 14-

EXCESS LANDS

25. (a) As used herein the term “excess land” means

that part of the irrigable land within the District in

excess of one hundred and sixty (160) acres held in the

beneficial ownership of any single person; or in excess

of three hundred and twenty (320) acres held in the

beneficial ownership of husband and wife jointly, as

tenants in common or by the entirety, or as community

property; the term “large landowners” means an owner

of excess lands and the term “nonexcess land” means all

irrigable land within the District which is not excess

land as defined herein.

(b) Each large landowner as a further condition

precedent to the right to receive water made available

pursuant to this contract for any of his excess land shall:

(i) Before any water is furnished by the

District to his excess land, execute a valid

recordable contract in form prescribed by the

United States, agreeing to the provisions

contained in this article and Articles 23 and 24

hereof and agreeing to dispose of his excess

land in accordance therewith to persons who

can take title thereto as nonexcess land as

herein provided and at a price not to exceed the

approved, appraised value of such excess land

and within a period of ten (10) years after the

date of the execution of said recordable con-

tract and agreeing further that if said land is not

so disposed of within said period of ten (10)

years, the Secretary shall have the power to

dispose of said land at the appraised value

thereof fixed as provided herein or such lower

price as may be approved by the owner of such

land, subject to the same conditions on behalf

of such large landowner; and the District agrees

-K15-

that it will refuse to furnish said water to any

large landowner other than for his nonexcess

land until such owner meets the conditions

precedent herein stated;

(ii) Within thirty (30) days after the date

of notice from the United States requesting

such large landowner to designate his irrigable

lands within the District which he desires to

designate as nonexcess lands, file in the office

of the District, in duplicate, one copy thereof to

be furnished by the District to the Bureau of

Reclamation, his ~written designation and

description of lands so selected to be nonexcess

land and upon failure to do so the District shall

make such designation and mail a notice

thereof to such large landowner, and in the

event the District fails to act within such period

of time as the Contracting Officer considers

reasonable, such designation will be made by

the Contracting Officer, who will mail a notice

thereof to the District and the large landowner.

The large landowner shall become bound by

any such action on the part of the District or the

Contracting Officer and the District will fur-

nish said water only to the land so designated

to be nonexcess land. A large landowner may

with the consent of the Contracting Officer

designate land other than that previously

designated as nonexcess land: Provided, That

an equal acreage of the land previously desig-

nated as nonexcess shall, upon such new

designation, become excess land thereafter

subject to the provisions of this article and

Articles 23 and 24 of this contract and shall be

described in an amendment of such recordable

contract as may have been executed by the

-K 16-

large landowner in the same manner as if such

land had been excess land at the time of the

original designation.

APPENDIX L

e t

EP I EO NL TELE LO OE I LOE LT LL EL A eae “

wt: Be

EXEMPLAR OF RECORDABLE CONTRACT

Book 987 Page 928

For Corporations

Recorded at request of Bureau of R.O Draft 2/20-1964

Reclamation At 25 min. past 11 a.m. Rev. R.O. 7/9-1968

April 17, 1972 (Westlands Water District)

Fee - $13.00 RC 772

Vol. 987 Official Records, P 928

Kings County, State of California

Beatrice Hawes, Auditor and Recorder Contract No.

by Kathleen Webb, Deputy 14-06-200-5783A

UNITED STATES

DEPARTMENT OF THE INTERIOR

BUREAU OF RECLAMATION

Central Valley Project, California

AGREEMENT PERTAINING TO

SALE OF EXCESS LANDS

THIS AGREEMENT, made this 21st day of

January, 1972, under the provisions of the Act of June

17, 1902 (32 Stat. 388), and acts amendatory thereof

or supplementary thereto, all collectively herein styled

the Federal reclamation laws, between THE UNITED

STATES OF AMERICA, herein styled “the United

States”, represented by the Secretary of the Interior

or his duly authorized representative, and BOSTON

RANCH COMPANY, a California corporation, herein

styled “the Landc wner”;

ee

WITNESSETH THAT:

WHEREAS, pursuant to the Federal reclamation

laws, the United States and the Westlands Water District

have entered into a contract herein referred to as the

District Contract, dated June 5, 1963, a copy of which is

on file in the office of said District in the City of Fresno,

County of Fresno, California, of which articles 23, 24,

and 25 provide for the execution of certain contracts by

owners of irrigable excess land within the District and

the valuation and conditions of sale of such land, and of

article 23 which, among other things, provides in part as

follows:

No water made available pursuant to this

contract shall be furnished to any excess lands

as defined in article 25 hereof unless the

owners thereof shall have executed valid

recordable contracts in form prescribed by the

United States, agreeing to the provisions of this

article and Articles 24 and 25 of this contract,

agreeing to the appraisal provided for in Article

24 hereof and that such appraisal shall be made

on the basis of the actual bona fide value of

such lands at the date of the appraisal without

reference to the construction of the Project, all

as hereinafter provided, and agreeing to the sale

of such excess lands under terms and condi-

tions satisfactory to the Secretary and at prices

not to exceed those fixed as _ hereinafter

provided.

WHEREAS, the Landowner is the owner of certain

land situated in the County of Kings, California, and

within the territorial limits of and incorporated into and

as a part of, the District; and

WHEREAS, the Landowner, pursuant to article 25

of the District Contract, has designated as nonexcess

_

land a portion of the aforesaid land and has filed with

the District a written description thereof;

NOW, THEREFORE, in consideration of the direct

and indirect benefits to be derived under the terms of the

District Contract, as implemented by this agreement, by

all of the lands of the Landowner within the District, and

as an inducement to the United States to make water and

distribution facilities available to the District for the

excess land of the Landowner, the Landowner agrees and

covenants for itself, its executors, administrators, heirs,

successors, and assigns, all of which agreements and

covenants are and each of them hereby is made a charge

upon the excess land of the Landowner to run with the

title to the said excess land, as follows:

1. Each term defined in the District Contract shall,

when used herein, have the same meaning as that which

it has when used in the District Contract.

2. The Landowner is the owner of excess land situ-

ated in Kings County, California, and particularly des-

cribed as follows:

PARCEL ONE: All of Section Eighteen (18), Township

Nineteen (19) South, Range Nineteen (19) East, Mount

Diablo Base and Meridian, containing an area of 639

acres, more or less.

PARCEL TWO: The west half (W 1/2), the north half

of the northeast quarter (N 1/2 NE 1/4), and the south

half of the southeast quarter (S 1/2 SE 1/4) of Section

Nineteen (19), Township Nineteen (19) South, Range

Nineteen (19) East, Mount Diablo Base and Meridian,

containing an area of 474 acres, more or less.

PARCEL THREE: The Southwest quarter (SW 1/4) and

the South half of the Northwest quarter (S 1/2 NW 1/4)

o

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