Petition for Writ of Certiorari — Mohave Valley Irrigation & Drainage District v. Norton

- Survene Crm 118.

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Noo1. 1 498 SEP 2 12001

IN THE

Supreme Court of the United States

MOHAVE VALLEY IRRIGATION AND DRAINAGE

DISTRICT, a political subdivision of the State of Arizona,

Petitioner,

Vv.

GALE A. NORTON, Secretary of Interior,

Respondent.

On PETITION FOR A WRIT OF CERTIORARI TO THE

UniteD STATES CouRT OF APPEALS FOR THE NINTH CIRCUIT

PETITION FOR A WRIT OF CERTIORARI

SHIRLEY S. SIMPSON TERRENCE S. LEEK

8914 South 14ist Avenue Counsel of Record

Goodyear, Arizona 85338 TERRENCE S. LEEK, P.C.

(623) 932-5683 126 North Marina

Prescott, Arizona 86301

(928) 778-7700

Attorneys for Petitioner

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QUESTION PRESENTED

This case really began in the early 1920’s when

representatives of seven western states met to allocate

Colorado River water among themselves. The Colorado

River Compact resulted. Congress also wrestled with

concerns over development of the arid Southwest. The

Boulder Canyon Project Act resulted. Congress delegated

broad discretion to respondent to contract with users of water

stored by the Project, but limited that discretion significantly

with respect to contracts for delivery of water that was

delivered to holders of present perfected rights. Arizona then

called upon this Court to interpret the Act and to allocate

Colorado River water among the states and their

appropriators. Petitioner has no present perfected rights in

Colorado River water. In 1968, under the broad authority

granted respondent, respondent’s predecessor entered into a

water delivery contract with petitioner. This Court has

provided an explicit roadmap in Arizona v. California and

Bryant v. Yellen for deciding cases interpreting the Project

Act. Nonetheless, the Ninth Circuit relied upon general

reclamation law, not the Boulder Canyon Project Act or this

Court’s decisions interpreting the Act, to opine that

petitioner’s 1968 water delivery contract expressly included

water that respondent was required to deliver to holders of

present perfected rights.

The question presented is whether present perfected

rights were included in petitioner’s 1968 contract for

permanent water service from the mainstream of the

Colorado River because land that these rights benefit is

located within the physical boundaries of petitioner’s district.

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TABLE OF CONTENTS

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Statutory Provisions Involved .................

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Reasons for Granting the Writ .................

I. The Proper Application of the Boulder

Canyon Project Act Is a Matter of Great

Concern to the Southwest and to the Nation

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II. Bryant v. Yellen Provides Explicit Guidelines

by Which to Decide with Whom Respondent

Is Authorized to Contract when Section 6

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TABLE OF CITED AUTHORITIES

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Cases:

Arizona v. California, 373 U.S. 546 (1963) ....... passim

Arizona v. California, 376 U.S. 340 (1963) . 3, 6,9, 10, 11

Arizona v. California, 439 U.S. 419 (1979) ...4, 10, 11, 12

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

Kennewick Irr. Dist. v. United States, 880 F.2d 1018

NL SEE rr er er ere ery eee ee 14, 15

Klamath Water Users Pro. Ass'n v. Patterson,

204 F.3d 1206 (9th Cir. 2000) ............... 15

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TABLE OF APPENDICES

Appendix A — Opinion Of The United States Court

Of Appeals For The Ninth Circuit Dated And Filed

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Appendix B — Order From Chambers And Judgment

Of The United States District Court For The

District Of Arizona Dated And Filed June 29,

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“Appendix C — Order Of The United States Court

Of Appeals For The Ninth Circuit Denying

Petition For Rehearing Dated And Filed June 29,

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Appendix D — Boulder Canyon Project Act,

43 U.S.C. §§ 617, 617d, 617e And 617g(a) ....

Appendix E — Contract For Delivery Of Water

Between United States Department Of The

Interior And The State Of Arizona (Ariz. REV.

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Appendix F — Final Decision Of The United States

Department Of The Interior Dated April 3, 1996

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18a

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Petitioner respectfully petitions for a writ of certiorari

to review the judgment entered by the United States Court

of Appeals for the Ninth Circuit in this case.

OPINIONS BELOW

The court of appeals’ opinion (per Schroeder, C.J., joined

by J. Wallace and Tallman, JJ.) affirming (Appendix

(“Pet. App.”) la-6a) is published at 244 F.3d 1164. The

-district court’s order and judgment (per Sedwick, D.J.)

granting respondent’s summary judgment motion and

denying petitioner’s cross motion (Pet. App. 7a-16a), the

court of appeals’ order denying rehearing and rehearing

en banc (id. 17a) and the final decision by the Department

of the Interior (id. 34a-37a), are not published.

STATEMENT OF JURISDICTION

The court of appeals entered its opinion on April 11,

2001, and denied rehearing and rehearing en banc on June 29,

2001. Petitioner invokes this Court’s jurisdiction under

28 U.S.C. § 1254(1).

STATUTORY PROVISIONS INVOLVED

The provisions of the Boulder Canyon Project Act, 43

U.S.C. § 617, et seg., pertinent to this petition are reprinted

in the Appendix at 18a. The provisions of the Colorado River

Compact, Ariz. Rev. Stat. § 45-1311, pertinent to this

petition provide:

ARTICLE |

The major purposes of this compact are to

provide for the equitable division and

2

apportionment of the use of the waters of the

Colorado River System; to establish the relative

importance of different beneficial uses of water;

to promote interstate comity; to remove causes

of present and future controversies; and to secure

the expeditious agricultural and industrial

development of the Colorado River Basin, the

storage of its waters and the protection of life and

property from floods. To these ends the Colorado

River Basin is divided into two Basins, and an

apportionment of the use of part of the water of

the Colorado River System is made to each of

them with the provision that further equitable

apportionments may be made.

ARTICLE VIII

Present perfected rights to the beneficial use

of waters of the Colorado River System are

unimpaired by this compact. Whenever storage

capacity of 5,000,000 acre feet shall have been

provided on the main Colorado River within or

for the benefit of the Lower Basin, then claims of

such rights, if any, by appropriators or users of

water in the Lower Basin against appropriators

or users of water in the Upper Basin shall attach

to and be satisfied from water that may be stored

not in conflict with Article III. All other rights to

beneficial use of waters of the Colorado River

System shall be satisfied solely from the water

apportioned to that Basin in which they are situate.

3

The water delivery contract between respondent and the State

of Arizona, id. § 45-1301, is reprinted in the Appendix

at 22a.

STATEMENT OF THE CASE

This case is a dispute between a state irrigation district

and the Secretary of Interior about a contract for the delivery

of Colorado River water. Petitioner says the contract is for

storage water under section 5' of the Boulder Canyon Project

Act, over which respondent has broad contracting authority.

Respondent says the contract includes water respondent is

required to deliver to holders of present perfected rights under

section 6’ of the Act. Respondent’s justification for her

position is that lands having decreed present perfected rights

are physically located within the district boundaries, even

though petitioner has no decreed present perfected rights? to

1. Boulder Canyon Project Act, ch. 42, § 5, 45 Stat. 1060. In

case law this provision is referred to simply as “section 5.” This

petition will also use this designation.

2. Boulder Canyon Project Act, ch. 42, § 6, 45 Stat. 1061. In

case law this provision is referred to simply as “section 6.” This

petition will also use this designation.

3. “Present perfected right” means a water right acquired in

accordance with state law, which right has been exercised by the

actual diversion of a specific quantity of water that has been applied

to a defined area of iand or to definite municipal or industrial works,

and existing as of June 25, 1929, the effective date of the Boulder

Canyon Project Act; and, in addition, shall include water rights

created by the reservation of mainstream water for the use of federal

establishments under federal law whether or not the water has been

applied to beneficial use. Arizona v. California, 376 U.S. 340, 341

(1963).

4

such water. The district court and the Ninth Circuit agree

with respondent. In its decision, the court of appeals has

applied general reclamation law, not the Boulder Canyon

Project Act, the Colorado River Compact, or Arizona v.

California, 373 U.S. 546 (1963) and its 1979 supplemental

decree to justify its decision. Thus, the decision ignores both

the significance to the nation and the critical importance to

the Southwest of how respondent distributes Colorado River

water. Moreover, the court of appeals’ decision is in direct

conflict with this Court’s decisions in Bryant v. Yellen, 447

’ U.S. 352 (1980), and Arizona v. California, 439 U.S. 419

(1979).

1. Petitioner, a political subdivision of the State of

Arizona, is an irrigation and drainage district. It is situated

in Mohave County, Arizona, along the Colorado River. The

landholders located within the district draw water from wells

that are connected hydraulically to the mainstream of the

Colorado River. Petitioner does not now have and never has

had present perfected rights in Colorado River water,

see Arizona v. California, 439 U.S. 419, 423-28 (1979); nor

does it hold such rights in trust on behalf of the landowners

located within the district, cf Bryant v. Yellen, 447 U.S. 352,

371 (1980) (irrigation district was trustee under state law

for owners of present perfected rights whose lands were

located within the district; the district had decreed rights for

such lands).

2. Respondent is the Secretary of Interior. The Boulder

Canyon Project Act, enacted in 1928, authorizes respondent

to store Colorado River water in the reservoir behind Hoover

Dam (formerly Boulder Dam), 43 U.S.C. § 617, and to

contract for the delivery of such water at points on the river

for irrigation and domestic uses, id. § 617d (section 5);

accord Arizona v. California, 373 U.S. 546, 561 (1963).

. 5

These contracts are for permanent service. /d. The Project

Act became effective on June 25, 1929. 373 U.S. at 561.

In November 1968, Secretary of Interior Stewart L. |

Udall, an Arizonan, personally executed a water delivery

contract with petitioner (the “1968 Contract”). The

interpretation of the 1968 Contract is at the center of the

dispute between petitioner and respondent. Respondent

insists that, in the contract water allotment of petitioner’s

1968 Contract, water represented by present perfected rights,

43 U.S.C. § 617e (section 6), is included and always has

been included.

3. In December 1995, petitioner sued respondent in the

district court for unilaterally reducing petitioner’s water

allotment in derogation of the 1968 Contract. Petitioner

invoked the jurisdiction of the district court under 28 U.S.C.

§ 1331 and 5 U.S.C. §§ 701-706. Respondent and petitioner

filed cross-motions for summary judgment that same month.

In March 1998, the case was assigned to a new judge. The

parties filed supplemental briefs in August 1998. In May

1999 the case was reassigned to Judge Sedwick, a district

judge in Anchorage, Alaska. On June 29, 1999, Judge

Sedwick entered his Order from Chambers and the Clerk

filed the Order and Judgment granting respondent’s summary

judgment motion and dismissing petitioner’s complaint.

Pet. App. 7a-16a.

The district court noted that respondent was obligated

by Arizona v. California and section 5 of the Boulder Canyon

Project Act to contract separately with landowners in

petitioner’s district who hold present perfected rights.

Id. 9a & n.5. The court was wrong about section 5 governing

contracts with holders of present perfected rights.

6

In section 5, Congress gave respondent broad discretion to

choose with whom and to choose upon what terms to contract

with users of storage water. In section 6, however, Congress

unequivocally limited respondent’s discretion. Section 6

contracts must conform to rights perfected under state law

prior the effective date of the Boulder Canyon Project Act

and decreed by this Court. Arizona v. California, 373 US.

546, 580-81 (1963).

Present perfected rights are never mentioned in the 1968

Contract. Not understanding the significance of the difference

between section 5 contracts, like petitioner’s 1968 Contract,

and section 6 contracts that respondent was required to make

with holders of present perfected rights, the district court

ruled for respondent, holding that parts of two provisions of

the 1968 Contract, Pet. App. 1la-13a, expressly provided

that present perfected rights were included within water

allocated to petitioner under section 5. Pet. App. Ila,

1Sa-16a.

4. On petitioner’s appeal the Ninth Circuit affirmed. The

opinion is exceptional for its reliance on the wrong federal

law and its exacerbation of the lower court’s lack of

understanding of the significant difference between section

5 contracts for storage water and section 6 contracts with

holders of present perfected rights.

In passing, the court of appeals cited the 1964 decree in

Arizona v. California, 376 U.S. 340, 341, Pet. App. 2a-3a,

for the definition of present perfected rights, and cited Bryant

v. Yellen, 447 U.S. 352, 364-64 (1980), for recognizing that

present perfected rights constitute a limitation on

respondent’s power to distribute water from the Colorado

River, Pet. App. 3a. The court of appeals relied entirely,

7

however, on Ninth Circuit cases that are not a part of the

law governing distribution of Colorado River water (the

“Law of the River”), Pet. App. 4a, and ignored the Boulder

Canyon Project Act. Congress intended the Project Act to

govern the distribution of Colorado River water among the

lower basin states and also to govern the distribution of such

water to contract water users pursuant to section 5 of the

Act, and to holders of present perfected rights pursuant to

section 6 of the Act. See Arizona v. California, 373 U.S.

546, 575-90 (1963).

5. The court of appeals denied petitioner’s request for a

panel rehearing and rehearing en banc. Pet. App. 17a. This

petition for a writ of certiorari followed.

REASONS FOR GRANTING THE WRIT .-

The petition should be granted for two reasons.

First, the Ninth Circuit’s opinion relies on general

reclamation law when, for 70 years, discussions, compacts,

federal legislation and ongoing litigation in this Court have

resulted in carefully and arduously crafted law,‘ that protects

the interests of Colorado River water users in the beneficial

use of mainstream water in arid desert states. The nation, as

well as the Southwest, has a significant interest in the

distribution of Colorado River water as Congress has

directed.

4. The “Law of the River,” includes the Colorado River

Compact, the Boulder Canyon Project Act, Arizona v. California,

373 U.S. 546 (1963), and its supplemental decrees, and Bryant v.

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

8

Second, the Ninth Circuit has decided this important

federal question in a way that conflicts with relevant

decisions of this Court interpreting the Boulder Canyon

Project Act. The court of appeals decided this question

without any consideration of the Law of the River. No other

circuit court hears and decides these cases so that, absent

review by this Court, the Ninth Circuit may go unchecked

in its propensity to apply general reclamation law without

reference to the Act.

I. The Proper Application of the Boulder Canyon

Project Act Is a Matter of Great Concern to the

Southwest and to the Nation

The history of the Act and the controversy surrounding

the Act illustrate its importance to the Southwest and the

nation. The Boulder Canyon Project Act requires satisfaction

of present perfected rights, id. § 617e; accord Arizona v.

California, 373 U.S. 546, 566 (1963). Section 6 of the Act

is a clear and unequivocal limitation on respondent’s power.

373 U.S. at 581, 584.

The Project Act further provides that both respondent

and petitioner are subject to and controlled by the Colorado

River Compact and that all water delivery contracts shall so

provide. 43 U.S.C. § 617g(a). On November 24, 1922,

representatives of the states of Arizona, California, Colorado,

Nevada, New Mexico, Utah and Wyoming executed the

Colorado River Compact. Ariz. Rev. Stat. § 45-1311. Article

VIII provides that “[p]resent perfected rights to the beneficial

use of waters of the Colorado River System are unimpaired

by this compact,” and provides further that once adequate

storage capacity was attained for the benefit of the lower

basin states, claims of present perfected rights by lower basin

9

appropriators against appropriators or users of water in the

upper basin attached and could be satisfied from Colorado

River water. /d. There could not be a plainer statement of

the importance of present perfected rights to the compacting

States, or a more significant limitation on the contracting

discretion of respondent.

In February 1944 the Secretary of Interior and the State

of Arizona entered into a water delivery contract pursuant

to Section 5 of the Project Act, see 373 U.S. at 591-92, for

the delivery of water to users in Arizona. Ariz. Rev. STAT.

§ 45-1301. This contract reiterates that present perfected

rights are unimpaired. /d. § 7(1).

In 1952 the State of Arizona invoked the original

jurisdiction of this Court by filing a complaint against the

State of California and seven of its public agencies. Later,

Nevada, New Mexico, Utah, and the United States were

added as parties. The basic controversy was over how much

water each State has a legal right to use out of the waters of

the Colorado River and its tributaries. See Arizona v.

California, 373 U.S. 546, 550 (1963). This Court stressed

the gravity of the Southwest’s water problems in an arid land,

id. at 552, and quoted the Fall-Davis Report to Congress, a

precursor to the enactment of the Boulder Canyon Project

Act, to the effect that flood control and development of the

resources of the Colorado River were peculiarly national

problems, id. at 554. The Court held that Congress, in the -

Boulder Canyon Project Act, apportioned the mainstream

of the Colorado River among Arizona, California and

Nevada. /d. at 564-65.

In 1964, this Court entered its Decree carrying into effect

the 1963 opinion. Arizona v. California, 376 U.S. 340.

10

The Court also ordered Arizona, and other states, to furnish

the Court and the Secretary of Interior with lists of claimed

present perfected rights and their claimed priority dates in

waters of the mainstream. /d. at 351-52. Arizona submitted

its list by October 1966.

By June 1968, Roy D. Gear, then Regional Supervisor

of the Water and Land Operations Division of the Bureau of

Reclamation, was part of a fact-finding committee to review

present perfected rights claims within the lower basin.

Arizona’s list included the claims of the Yuma Valley

Project, Valley Division, and Unit B, the North Gila Valley

Irrigation District, and Cibola Valley Irrigation District, as

well as some Arizona cities, towns and state agencies. It also

included miscellaneous claims of individuals, including the

Hurschlers, whose land is situated within the physical

boundaries of petitioner’s district and whose contract with

respondent is mentioned in the court of appeals’ opinion.

Arizona did not submit a claim for petitioner. Respondent’s

predecessors knew, through Mr. Gear, from 1968 forward,

what claims for present perfected rights the State of Arizona

was asking this Court to decree to appropriators within

Arizona. Respondent’s predecessors were active participants

in advising this Court as to what present perfected rights

existed in the State of Arizona, including those situated

within the current boundaries of petitioner’s district.

In 1979, this Court decreed present perfected rights to

those entitled to them under state law and Section 6 of the

Project Act. Arizona v. California, 439 U.S. 419. The Court

decreed present perfected rights within Arizona to the Valley

Division, Yuma Project, the Yuma Auxiliary Project,

Unit B, the North Gila Valley Unit, Yuma Mesa Division,

Gila Project, and to the City of Parker and City of Yuma.

11

Id. at 423-24, 427. It also decreed present perfected rights to

private individuals owning land within the external

boundaries of petitioner, id. at 424-28, including the

Hurschlers, id. at 425. The Court was not asked to decree

any present perfected rights to petitioner and did not do so.

Id. at 423-28. This Court, in Arizona v. California, set out

exactly what mainstream water respondent must deliver to

specific holders of present perfected rights for use on

specifically described land. Respondent has no discretion

under the Boulder Canyon Act, the Colorado River Compact

and Arizona v. California, but to deliver that water to the

holder as decreed and to no other person or entity.

In November 1968, the parties executed the Section 5

water delivery contract. The 1968 Contract, by its own terms,

was made pursuant to the Boulder Canyon Project Act, the

Colorado River Compact, the 1944 Contract between the

United States and the State of Arizona, the Court’s opinion

in Arizona v. California, 373 U.S. 546 (1963), and the decree

entered in 1964, 376 U.S. 340. The 1968 Contract contains

a provision for a ten-year review of the existing and potential

water uses and needs of petitioner. Under this provision,

respondent may reduce the maximum number of acre feet of

water to be delivered annually to petitioner under the

contract, after notice to petitioner and an opportunity to be

heard. The 1968 Contract also contains a provision imposing

the 160-acre limitation on deliveries of contract water. These

provisions are appropriate for Section 5 contracts, but not

for section 6 contracts.

In March 1984, respondent’s predecessor entered into a

water delivery contract entitled, “Contract for Delivery of

Colorado River Water to Holders of Miscellaneous Present

Perfected Rights.” Roy D. Gear, by then Regional Director

12 \

of the Lower Colorado Region of the Bureau of Reclamation,

executed this contract on behalf of respondent’s predecessor.

The contract recited that the Hurschlers were the holders “of

a miscellaneous present perfected right decreed and listed

in the Supplemental Decree of January 9, 1979,” see Arizona

v. California, 439 U.S. 419, 425. The Hurschler contract does

not contain a provision imposing the 160-acre limitation or

a provision for reducing the contract water allotment.

In January 1989, the Regional Director for the Lower

Colorado Region of the Bureau of Reclamation advised

petitioner “that a review of the Mohave Valley Irrigation

and Drainage District’s (District) water service contract dated

November 14, 1968, has been completed, and it has been

determined that no reduction in the District’s Colorado River

water allocation will be required (see Subarticle 10(h)).”

Thus, after execution of the Hurschlers’ section 6 water

contract for delivery of mainstream water within the physical

boundaries of petitioner’s district, the water allocation in

petitioner’s section 5 contract remained unchanged.

The dispute between petitioner and respondent began in

May 1993, when, responding to a request from the Regional

Director of the Lower Colorado Region of the Bureau of

Reclamation, the Field Solicitor from the Phoenix Field

Office of Interior’s Office of the Solicitor opined that

respondent was free to reduce water deliveries under

petitioner’s 1968 Contract commensurate with water

contracted for by owners of land physically within the

boundaries of petitioner’s district that had present perfected

rights. He came to this opinion despite his conclusion that

the 1968 Contract

13

cannot be construed as granting to either the

District or a PPR holder within the District, any

PPR water, or, in any other way acting to satisfy

PPRs as required by Section 6 of the Boulder

Canyon Act. The contract is what it purports to

be, i.c., a contract for the delivery of stored water

executed under authority of Section 5 of the

Boulder Canyon Project Act.

Petitioner agrees entirely with this latter conclusion of the

Field Solicitor.

Next, in June 1994, some years before the next ten-year

review of the 1968 Contract was due, respondent received a

determination letter from the Acting Regional Director for

Lower Colorado Region of the Bureau of Reclamation. This

letter advised petitioner that Colorado River water used on

land located within the physical boundaries of petitioner’s

district, by holders of present perfected rights pursuant to

section 6 of the Project Act, would be charged against

petitioner’s water allocation in the 1968 Contract.

Petitioner appealed the Lower Colorado Region’s

determination letter in August 1994. By letter of April 3,

1996, the Commissioner of the Bureau of Reclamation, in a

final decision of the Department of Interior, found that the

water represented by present perfect rights for land that is

located within the boundaries of petitioner’s district was

subsumed into petitioner’s 1968 Contract. Are we now to

believe that respondent’s predecessors did not understand

the significant difference between section 5 water and section

6 water when drafting water contracts, even though the Field

Solicitor plainly concluded that the 1968 Contract was a

section 5 contract for delivery of storage water?

14

Il. Bryant v. Yellen Provides Explicit Guidelines by

Which to Decide wita Whom Respondent Is

Authorized to Contract when Section 6 Present

Perfected Rights Are Involved

Apparently, the guidance of this Court in Arizona v.

California, 373 U.S. 546 (1963), regarding the importance

of preserving the rights of holders of present perfected rights

was not sufficient to guide the Ninth Circuit. In 1980, this

Court reversed the court of appeals in Bryant v. Yellen, 447

U.S. 352, 379. The court of appeals had sustained the

government’s position that the 160-acre limitation contained

in general reclamation law applied to all privately owned

land in the Imperial Irrigation District whether or not the

District had been adjudicated to have a perfected water right

as of 1929. Jd. at 355-56. Just as in petitioner’s case,

respondent’s predecessor repudiated the government’s long-

term understanding of the Imperial Irrigation District’s water

delivery contract and the Ninth Circuit applied general

reclamation law and not the Boulder Canyon Project Act.

Id. In Bryant, the Court recited, again, the development of

the Law of the River. /d. at 355-60. This Court found that

“the Court of Appeals failed to take adequate account of § 6

of the Project Act and its implementation in our opinion and

decrees filed in the Arizona v. California litigation.” /d. at

370.

The Ninth Circuit opinion in this case relies on

Kennewick Irr. Dist. v. United States, 880 F.2d 1018 (9th

Cir. 1989). Kennewick involved the discretionary-function

exception to the Federal Tort Claims Act. /d. 4 1. Borrowing

a quote from Bryant, the Kennewick court was “not dealing

with perfected rights to water that the project there involved

would furnish, nor with a Project Act that specifically

required present perfected rights to be satisfied. Here we are

15

dealing with perfected rights protected by the Project Act.”

Bryant v. Yellen, 447 U.S. at 372.

There is no rationale for the Ninth Circuit to rely on

Kennewick to impute to respondent discretion to include

water decreed to holders of present perfected rights in a

section 5 water delivery contract merely because petitioner

is an irrigation district and the land with decreed rights is

physically located within petitioner’s district. Moreover,

there is nothing in the Law of the River that gives respondent

such discretion.

The Ninth Circuit also relies on Klamath Water Users

Pro. Ass'n v. Patterson, 204 F.3d 1206 (9th Cir. 2000). The

contract at issue in Klamath, was “entered into pursuant to

the Reclamation Act and ‘acts of Congress relating to the

preservation and development of fish and wildlife

resources,’ ” id. at § 4, not pursuant to the Law of the River.

Again, nothing in Klamath provides a rationale for the court

of appeals’ decision. The court of appeals’ justification for

relying on these cases is that it “has consistently applied

federal law to interpret reclamation contracts.” Pet. App. at

4a. If the Ninth Circuit continues unchecked by this Court

to apply general reclamation law to the interpretation of water

delivery contracts made pursuant to the Boulder Canyon

Project Act, respondent will be encouraged to ignore the

Section 6 limitation on her contracting power when

contracting for delivery of water held by holders of present

perfected rights. Under the Law of the River, respondent

cannot deliver such water to any user of her choice.

16

CONCLUSION

For the foregoing reasons, the petition for a writ of

certiorari should be granted.

Respectfully submitted,

SHIRLEY S. SIMPSON TERRENCE S. LEEK

8914 South 141st Avenue Counsel of Record

Goodyear, Arizona 85338 TERRENCE S. LEEK, P.C.

(623) 932-5683 126 North Marina

Prescott, Arizona 86301

(928) 778-7700

Attorneys for Petitioner

APPENDIX

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APPENDIX A — OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE NINTH CIRCUIT

DATED AND FILED APRIL 11, 2001

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 99-16927

D.C. No. CV-95-02640-JWS

MOHAVE VALLEY IRRIGATION & DRAINAGE DisTRICT,

Plaintiff-Appellant,

v.

GALE A. NorTON, SECRETARY OF INTERIOR,

Defendant-Appellee.

OPINION

Appeal from the United States District Court

for the District of Arizona

John W. Sedwick, District Judge, Presiding

Argued and Submitted

February 15, 2001 — San Francisco, California

Filed April 11, 2001

Ce aaa a ee

2a

Appendix A

Before: Mary M. Schroeder, Chief Judge,

J. Clifford Wallace, and Richard C. Tallman, Circuit Judges.

Opinion by Chief Judge Schroeder

* * *

OPINION

SCHROEDER, Chief Judge:

The Mohave Valley Irrigation and Drainage District

(“District”), located in western Arizona, appeals the district

court’s grant of summary judgment to Gale Norton, in her

capacity as Secretary of the Interior (“Interior”). The District

alleges that Interior breached a 1968 contract entitling the

District to 41,000 acre feet of water annually from the

Colorado River system. The District and Interior differ on

whether that entitlement encompasses water delivered to

landowners in the District who hold present perfected rights

(“PPRs”) to Colorado River water.

The Supreme Court has defined PPRs as those rights to

water from the Colorado River system existing as of June

25, 1929, acquired under state law and having been put to

beneficial use, as well as all rights created under federal law.

It defined the scope of such rights as follows:

[Any water right] acquired in accordance with

state law, which right has been exercised by the

actual diversion of a specific quantity of water

that has been applied to a defined area of land or

3a

Appendix A

to definite municipal or industrial works . . . [as

well as] rights created by the reservation of

mainstream water for the use of federal

establishments under federal law whether or not

the water has been applied to beneficial use.

Arizona v. California, 376 U.S. 340, 341 (1964). Pursuant

to 43 U.S.C. § 617e, the Department of Interior is obligated

to use water from the Colorado River system to supply

holders of present perfected rights. See Bryant v. Yellen, 447

U.S. 352, 364-65 (1980) (recognizing that present perfected

rights constitute a limitation on Interior’s power to distribute

water from the Colorado River).

The District entered into a contract in 1968 to establish

its limited entitlement to water from the lower Colorado

River, its related reclamation projects, and wells fed by the

River’s groundwater and Interior’s projects. The contract

establishes the District’s annual allotment of water (currently

set at 41,000 acre feet) and provides specific procedures

through which the entitlement can be adjusted every ten

years. The contract does not explicitly mention the impact

of water deliveries to holders of PPRs located within the

District’s boundaries.

Interior maintains it fulfills its responsibility if it

calculates the District’s allotment by subtracting water

provided to holders of PPRs located within the District from

the amount fixed by the contract. The district court agreed

with Interior. It found that the allotment of water in the

contract encompasses all the water delivered to the District,

even if some of that water goes to landowners who hold

4a

Appendix A

PPRs. The District appeals, contending that the contract is

ambiguous and that a trial is necessary to establish its

entitlement to the full water allotment under the contract, in

addition to the water delivered to holders of PPRs.

Federal law governs the interpretation of contracts where

the United States is a party. O'Neill v. United States, 50 F.3d

677, 682 (9th Cir. 1995). This Court has consistently applied

federal law to interpret reclamation contracts. See, e.g.,

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

1206, 1210 (9th Cir. 1999); Kennewick Irrigation Dist. v.

United States, 880 F.2d 1018, 1032 (9th Cir. 1989). We

interpret the 1968 contract between the District and Interior

by considering whether a reasonable person would find the

contract’s terms to be ambiguous. Castaneda v. Dura-Vent

Corp., 648 F.2d 612, 619 (9th Cir. 1981). On its face, the

contract language supports Interior’s interpretation. The

contract broadly defines the District as follows:

that area of land in Mohave County, formally

included within the Mohave Valley Irrigation and

Drainage District . . . [except] those lands that are

within the external boundaries of the District but

which have been excluded from the District

pursuant to resolution or any order of a court of

proper jurisdiction ....

There is no judicial decision excluding the areas belonging

to holders of PPRs from the scope of the definition of water

delivered to the District, nor does the contract language itself

make any exceptions for holders of PPRs. Moreover, “water

delivered” is defined in the contract as:

Sa

Appendix A

all water pumped by the District or by any other

person, firm, or Corporation, from wells located

within or outside the District for use within the

District or from wells located within the District

for use outside the District . . .

The breadth of the definitions of “water delivered” and

“District” lends support to the view that the contract’s

allocation of water makes no exception for water delivered

to PPR holders.

The District makes much of the fact that the contract

does not mention PPRs, but the omission does not help its

cause. PPRs had already been recognized by the Supreme

Court well before the parties entered into the contract.

See Arizona, 376 U.S. at 341. If the parties intended to

exclude water received by holders of PPRs, the contract

would not have defined the waters included in the allocation

SO expansively.

The District contends there is extrinsic evidence that

supports its position. We look to the Uniform Commercial

Code (“UCC”) to decide whether we can consider extrinsic

evidence to determine whether a contract, clear on its face,

is actually ambiguous. O ‘Neill, 50 F.3d at 683-84. According

to the UCC, to determine whether a contract’s terms are

ambiguous, courts may only consider evidence of course of

dealing, trade usage, or course of performance. UCC § 2-202.

The District first points to Interior’s handling of the first

individual contract with a PPR holder (the Hurschler family)

located within the District’s territory. We assume, without

6a -

Appendix A

deciding, that this evidence constitutes trade usage evidence

admissible under the UCC to determine whether there exists

a latent ambiguity in the contract. After the Hurschler

contract entered into force, Interior did not reduce or change

the District’s allotment of water. It was not until nine years

later that Interior decided, on the advice of its field solicitor,

to reduce the District’s water allotment in proportion to

delivery of water to PPR holders. Yet the Hurschler contract

contains a clause providing that it was made “with the express

understanding that. . . the Colorado River water entitlement

of [the District] shall not be increased in any way by virtue

of this contract.” Interior could not reasonably have believed

that the District’s contractual entitlement increased by virtue

of the recognition of the Hurschlers’ PPRs. Thus, this

evidence does not render the contract between the District

and Interior ambiguous.

The District also presents the minutes of its Board of

Directors meeting in April 1969 to make the case that the

contract is ambiguous. The minutes suggest that the District’s

Chairman thought at that time that water delivered to PPR

holders would be added, not subtracted, from the District’s

allotment. This, too, is unhelpful. The minutes of the

District’s Board of Directors meeting do not represent

evidence of any course of mutual conduct, trade usage, or

performance and, thus, may not be considered. See UCC

§ 2-202. In the absence of such evidence, the contract is not

ambiguous.

AFFIRMED.

7a

APPENDIX B — ORDER FROM CHAMBERS AND

JUDGMENT OF THE UNITED STATES DISTRICT

COURT FOR THE DISTRICT OF ARIZONA

DATED AND FILED JUNE 29, 1999

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

CIV-95-2640-PCT-EHC (JWS)

MOHAVE VALLEY IRRIGATION AND DRAINAGE

DISTRICT, a political subdivision

of the State of Arizona,

Plaintiff,

vs.

HONORABLE BRUCE E. BABBITT, Secretary of the

United States Department of the Interior,

Defendant.

ORDER FROM CHAMBERS

{[Re: Motion for Summary Judgment and

Cross-Motion for Summary Judgment

Dockets 22, 26, and 32]

I. MOTIONS PRESENTED

At docket 22, defendant Bruce E. Babbitt, Secretary of

the United States Department of the Interior (“Babbitt”)

moves for summary judgment. The motion is opposed by

8a

Appendix B

plaintiff Mohave Valley Irrigation and Drainage District

(“Mohave Valley”) at docket 32.' Mohave Valley also cross-

moves for summary judgment at docket 26. Oral argument

was not requested pursuant to Local Rule 1.10(f)(1) before

this case was re-assigned. Oral argument would not assist

the court.

Il. BACKGROUND

This is a water-rights case. Mohave Valley is an Arizona

irrigation district. Mohave Valley executed a contract with

the United States in 1968 by which the United States

obligated itself to supply Mohave Valley with a maximum

of 51,000 acre feet per year of Colorado River water.’ Mohave

Valley’s entitlement was fixed at 41,000 acre feet per year in

1979. Certain landowners in Mohave Valley’s area possess what

is known as “present perfected rights.” These rights have been

defined by the United States Supreme Court:

1. Mohave Valley’s response at docket 32 is being tracked as

a separate “motion” under the court’s docketing scheme. However,

it is not a “motion,” but as noted an opposition to Babbit’s motion

for summary judgment.

2. Babbitt’s memorandum of law at docket 23 sets forth the

historical and legal background preceding the 1968 contract's

execution, including the 1922 Colorado River Compact which

allocated water among all Upper and Lower Basin States drawing

water from the Colorado River, the Boulder Canyon Project Act of

1928 which allocated water among the Lower Basin States, including

Arizona, and subsequent legal developments. See Babbitt’s

Memorandum of Law, docket 23 at 2-5. Rather than restate Babbit’s

concise and helpful summary, the court incorporates it within this

order by reference for brevity’s sake.

9a

Appendix B

(G) ‘Perfected right’ means a water right acquired

in accordance with state law, which right has been

exercised by the actual diversion of a specific

quantity of water that has been applied to a defined

area of land or to definite municipal or industrial

works, and in addition shall include water rights

created by the reservation of mainstream water

for the use of federal establishments under federal

law whether or not the water has been applied to

beneficial use;

(H) ‘Present perfected rights’ means perfected

rights, as here defined, existing as of June 25,

1929, the effective date of the Boulder Canyon

Project Act;?

There are between 5,800 acre feet and 5,940 acre feet of

present perfected rights in the concerned district owned by a

total of seven landowners. Under the Boulder Canyon Project

Act of 1928, 43 U.S.C. §§ 617-617v (“Act”), the United States

must satisfy present perfected rights when allocating water from

the Colorado River.* The United States Bureau of Reclamation

is obligated to separately contract with landowners in

Mohave Valley’s district who hold present perfected rights.°

3. Arizona v. California, 376 U.S. 340, 341, 84 S. Ct. 755,

756 (1964).

4. 43 U.S.C. § 617e; see also Bryant v. Yellen, 447 U.S. 352,

369-71, 100 S. Ct. 2232, 2242-43 (1980) (for discussion).

5. See, e.g., Arizona v. California, 376 U.S. 340, 342, 84

S. Ct. 755, 756-57 (1964); Arizona v. California, 373 U.S. 546,

584, 83 S. Ct. 1468, 1490 (1963); 43 U.S.C. § 617d.

10a

Appendix B

The United States contends that the amount of water thus

allocated to these landowners is included within the amount

of water allocated to Mohave Valley. Mohave Valley, in

contrast, argues that the 1968 contract does not allow for

such an inclusion which essentially subtracts water it is due

under contract. Other facts as relevant are stated below.

III. STANDARD OF REVIEW

Rule 56 of the Federal Rules of Civil Procedure provides

that summary judgment should be granted if there is no

genuine dispute as to material facts and if the moving party

is entitled to judgment as a matter of law. The moving party

has the burden of showing that there is no genuine dispute

as to material fact.° The moving party need not present

evidence; it need only point out the lack of any genuine

dispute as to material fact.’ Once the moving party has met

this burden, the non-moving party must set forth evidence

of specific facts showing the existence of a genuine issue

for trial.* All evidence presented by the non-movant must

be believed for purposes of summary judgment and all

justifiable inferences must be drawn in favor of the non-

movant.® However, the non-moving party may not rest upon

mere allegations or denials, but must show that there is

sufficient evidence supporting the claimed factual dispute

6. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).

7. Id. at 323-325.

8. Anderson v. Liberty Lobby, Inc.,477 U.S. 242, 248-9 (1986).

9. Id. at 255.

lla

Appendix B

to require a fact-finder to resolve the parties’ differing

versions of the truth at trial.'°

IV. DISCUSSION

Babbitt argues that the 1968 contract express?y provides

that present perfected rights shall be included within water

allocated to Mohave Valley. To reach this conclusion,

Babbitt relies upon two provisions in the 1968 contract,

Article 10(a)(i) and Article 9(h). Article 10(a)(i) provides:

To provide water exclusively for irrigation and

domestic use by and within the District, the United

States will, from storage available in Lake Mead,

deliver to the District at such point or points in

the Colorado River as may be mutually agreed to

in writing by the parties hereto and within the

limitations as to the rate of delivery hereinafter

specified, such quantities of surface water as may

be ordered by the District and as may be necessary

to supply the District with a total quantity,

including all other waters diverted directly from

the surface flow of the Colorado River or

withdrawn by underground pumping from such

wells and for such uses as are described in Article

9(h) above, not in excess of 51,000 acre feet per

: calendar year minus, however, such quantity or

| quantities as may be withdrawn by reason of

reductions made by the United States pursuant to

the provisions of Articles 10(g), (h), and (i).!'

10. Id. at 248-9.

4 11. Contract, Article 10(a)(i) at 6 (emphasis added).

12a

Appendix B

The contract defines “District” as a geographic area

encompassing “that area of land in Mohave County, formally

included within the MOHAVE VALLEY IRRIGATION

AND DRAINAGE DISTRICT ....”!? Article 10(a)(i)

therefore obligates the United States to provide water “for

irrigation and domestic use by and within the District”

including “such quantities . . . as may be necessary to supply

the District with a total quantity” which includes “all other

waters diverted directly from the surface flow of the Colorado

River or withdrawn by underground pumping from such

wells and for such uses as are described in Article 9(h).”

Article 9(h) provides:

“Water diverted by the District” and “water

delivered to District” means Colorado River water

available for diversion by the District directly

from the surface flow of the river, sometimes

hereafter referred to as “surface water” and, for

water accounting and payment purposes pursuant

to the provisions of the Contract, particularly

Articles 12, 13, and 14 hereof, and for the

purposes of Article 21 herein concerning excess

lands, shall be deemed to include all water

pumped by the District or by any other person,

firm, or Corporation, from wells located within

or outside the District for use within the District

or from wells located within the District for use

outside the District, sometimes hereafter referred

to as “pumped water.” All pumped water shall be

deemed to be “water drawn from the mainstream

12. Contract, Article 10(g) at 5.

13a

Appendix B

>

of the Colorado River by underground pumping’

pursuant to Article I(c) of the Decree of the

Supreme Court referred to in Article 5 hereof.

Pumped water drawn from lands within the

external boundary of the District that are not part

of the District, as defined in Paragraph (g) above,

shall not be charged against the 51,000 acre feet

allocated to the District under this Contract."*

Babbit contends that these two articles establish that

Mohave Valley’s entitlement includes water allocated to

present perfected rights. The court agrees. By its own terms,

the contract obligated the United States to provide water for

use “by and within the District . . . including all other waters

diverted directly from the surface flow of the Colorado River

or withdrawn from the mainstream of the Colorado River by

underground pumping from such wells and for such uses as

are described in Article 9(h).”'* The contract specifies that

all pumped water is considered to be water withdrawn from

the mainstream of the Colorado River by underground

pumping.’ Article 9(h) contemplates “such uses” as the

delivery to excess lands that amount of water pumped “by

the District or by any other person, firm, or Corporation,

from wells located within or outside the District for use

within the District or from wells located within the District

for use outside the District.’'®

13. Contract, Article 9(h) at 5-6 (emphasis added).

14. Contract, Article 10(a)(i) at 6.

15. Contract, Article 9(h) at 5.

16. Id.

l4a

Appendix B

The contract includes an exception. Article 9(h) provides

that pumped water “drawn from lands within the external

boundary of the District that are not part of the District, as

defined in Paragraph (g) above, shall not be charged against

the 51,000 acre feet [subsequently amended to 41,000 acre

feet in 1979] allocated to the District under this Contract.”"’

Babbitt notes, as an example of such lands, the Fort Mohave

Indian Tribe reservation.'* This exception essentially

recognizes that the contract provides that water allocated to

lands within the District — as “District” is defined in Article

9(g) — is included within the total amount of water allocated

to Mohave Valley. If this were not the case, then the

exception would not be necessary. Mohave Valley does not

argue that this exception is applicable, and the court is aware

of no evidence that would suggest that the exception applies

in this case. In short the 1968 contract may not be a model

of clarity, but its terms expressly provide that the total

quantity of water the United States is obligated to allocate

to Mohave Valley includes all other water allocated to the

District which by operation of law would include water

allocated to present perfected rights.

Instead of addressing the contract’s terms and provisions,

Mohave Valley launches a barrage of arguments which, in

this court’s opinion, miss the mark. Mohave Valley contends

that allocating water for present perfected rights violates

administrative law, that Babbitt is attempting to unilaterally

amend the contract, that the contract is ambiguous, that the

17. Contract, Article 9(h) at 6.

18. Response to Plaintiff's Motion for Summary Judgment, |

docket 34 at 4 n.4.

15a

Appendix B

contract must be strictly construed against the United States,

that the decision to include water allocated for present

perfected rights within the total amount of water allocated

to Mohave Valley represents an unconscionable decision,

that the contract should be reformed to accommodate the

parties’ purported original intent, and a number of other

arguments too numerous to recite. The court has considered

Mohave Valley’s arguments and finds them unpersuasive

principally for those reasons stated in Babbitt’s response at

docket 34.

V. CONCLUSION

For the foregoing reasons, the United States’ motion for

summary judgment at docket 22 is GRANTED, and Mohave

Valley’s motions at docket 26 is DENIED. As an

administrative matter, the Clerk of Court will also reflect

that Mohave Valley’s “motion” at docket 32 has also been

DENIED in order that this “motion” may be cleared from

the court’s docket.'®

DATED at Anchorage, Alaska this 25" day of June,

1999.

s/ John W. Sedwick

JOHN W. SEDWICK

UNITED STATES DISTRICT

JUDGE

19. See note 1, supra.

l6a

Appendix B

UNITED STATES DISTRICT COURT

DISTRICT OF ARIZONA

CIV-95-2640-PCT-EHC (JWS)

MOHAVE VALLEY IRRIGATION

AND DRAINAGE DISTRICT,

Plaintiff,

v.

HONORABLE BRUCE E. BABBITT

Defendant.

JUDGMENT

* * &

XXXX Decision by Court. This action came for

consideration before the Court. The issues have

been considered and a decision has been rendered.

IT IS ORDERED ADJUDGED that this Court having

granting Defendant’s motion for summary judgment; Plaintiff

take nothing. This complaint and action are hereby dismissed.

DATED at Phoenix, Arizona, this 29th day of June, 1999.

RICHARD H. WEARE

DCE/Clerk of Court

By: [illegible]

Deputy Clerk

17a

APPENDIX C — ORDER OF THE UNITED STATES

COURT OF APPEALS FOR THE NINTH CIRCUIT

DENYING PETITION FOR REHEARING

DATED AND FILED JUNE 29, 2001

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

No. 99-16927

D.C. No. CV-95-02640-JWS

MOHAVE VALLEY IRRIGATION &

DRAINAGE DISTRICT,

Plaintiff-Appellant,

v.

GALE A. NORTON, SECRETARY OF INTERIOR,

Defendant-Appellee.

ORDER

Before:

SCHROEDER, Chief Judge, WALLACE, and TALLMAN,

Circuit Judges.

The panel as constituted above has voted to deny the

petition for rehearing and the petition for rehearing en banc.

The full court has been advised of the petition for

rehearing en banc and no active judge has requested a vote

on whether to rehear the matter en banc. Fed. R. App. P. 35.

The petition for rehearing and the petition for rehearing

en banc are denied.

18a

APPENDIX D — BOULDER CANYON PROJECT

ACT, 43 U.S.C. §§ 617, 617d, 617e AND 617 g(a)

Sec. 617. Colorado River Basin; protection and

development; dam, reservoir, and incidental works;

water, water power, and electrical energy; eminent

domain

For the purpose of controlling the floods, improving

navigation, and regulating the flow of the Colorado River,

’ providing for storage and for the delivery of the stored waters

thereof for reclamation of public lands and other beneficial

uses exclusively within the United States, and for the

generation of electrical energy as a means of making the

project herein authorized a self-supporting and financially

solvent undertaking, the Secretary of the Interior subject to

the terms of the Colorado River compact hereinafter

mentioned in this chapter, is authorized to construct, operate,

and maintain a dam and incidental works in the main stream

of the Colorado River at Black Canyon or Boulder Canyon

adequate to create a storage reservoir of a capacity of not

less than twenty million acre-feet of water and a main canal

and appurtenant structures located entirely within the United

States connecting the Laguna Dam, or other suitable

diversion dam, which the Secretary of the Interior is

authorized to construct if deemed necessary or advisable by

him upon engineering or economic considerations, with the

Imperial and Coachella Valleys in California, the expenditures

for said main canal and appurtenant structures to be

reimbursable, as provided in the reclamation law, and shall

not be paid out of revenues derived from the sale or disposal

of water power or electric energy at the dam authorized to

be constructed at said Black Canyon or Boulder Canyon, or

for water for potable purposes outside of the Imperial and

:

4

’

4

4

t

}

4

4

:

7

19a

Appendix D

Coachella Valleys: Provided, however, That no charge shall

be made for water for the use, storage, or delivery of water

for irrigation or water for potable purposes in the Imperial

or Coachella Valleys; also to construct and equip, operate,

and maintain at or near said dam, or cause to be constructed,

a complete plant and incidental structures suitable for the

fullest economic development of electrical energy from the

water discharged from said reservoir; and to acquire by

proceedings in eminent domain, or otherwise, all lands,

rights-of-way, and other property necessary for said

purposes.

Sec. 617d. Contracts for storage and use of waters for

irrigation and domestic purposes; generation and sale of

electrical energy

The Secretary of the Interior is authorized, under such general

regulations as he may prescribe, to contract for the storage

of water in said reservoir and for the delivery thereof at such

points on the river and on said canal as may be agreed upon,

for irrigation and domestic uses, and generation of electrical

energy and delivery at the switchboard to States, municipal

corporations, political subdivisions, and private corporations

of electrical energy generated at said dam, upon charges that

will provide revenue which, in addition to other revenue

accruing under the reclamation law and under this subchapter,

will in his judgment cover all expenses of operation and

maintenance incurred by the United States on account of

works constructed under this subchapter and the payments

to the United States under subsection (b) of section 617c of

20a

Appendix D

this title. Contracts respecting water for irrigation and

domestic uses shall be for permanent service and shall

conform to subsection (a) of section 617c of this title. No

person shall have or be entitled to have the use for any

purpose of the water stored as aforesaid except by contract

made as herein stated.

Sec. 617e. Uses to be made of dam and reservoir; title in

whom; leases, regulations; limitation on authority

The dam and reservoir provided for by section 617 of this

title shall be used: First, for river regulation, improvement

of navigation, and flood control; second, for irrigation and

domestic uses and satisfaction of present perfected rights in

pursuance of Article VIII of said Colorado River compact;

and third, for power. The title to said dam, reservoir, plant,

and incidental works shall forever remain in the United

States, and the United States shall, until otherwise provided

by Congress, control, manage, and operate the same, except

as herein otherwise provided: Provided, however, That the

Secretary of the Interior may, in his discretion, enter into

contracts of lease of a unit or units of any Government-built

plant, with right to generate electrical energy, or alternatively,

to enter into contracts of lease for the use of water for the

generation of electrical energy as herein provided, in either

of which events the provisions of section 617d of this title

relating to revenue, term, renewals, determination of

conflicting applications, and joint use of transmission lines

under the contracts for sale of electrical energy, shall apply.

*_ * **

2la

Appendix D

Sec. 617g. Colorado River compact as controlling

authority in construction and maintenance of dam,

reservoir, canals, and other works

(a) The United States, its permittees, licensees, and

contractees, and all users and appropriators of water stored,

diverted, carried, and/or distributed by the reservoir, canals,

and other works herein, authorized shall observe a: i be

subject to and controlled by said Colorado River compact in

the construction, management, and operation of said

reservoir, canals, and other works and the storage, diversion,

delivery, and use of water for the generation of power,

irrigation, and other purposes, anything in this subchapter

to the contrary notwithstanding, and all permits, licenses,

and contracts shall so provide.

* * * *

22a

APPENDIX E — CONTRACT FOR DELIVERY OF

WATER BETWEEN UNITED STATES DEPARTMENT

OF THE INTERIOR AND THE STATE OF ARIZONA

(ARIZ. REV. STAT. § 45-1301)

45-1301. Ratification of Lake Mead contract

There is hereby unconditionally ratified, approved and

confirmed, that certain contract for the storage and delivery

of water from Lake Mead executed on behalf of the United

States by the honorable Harold L. Ickes, secretary of the

interior, and on behalf of the state of Arizona by its Colorado

river commission, bearing date the 9th day of February, 1944,

as follows:

UNITED STATES DEPARTMENT

OF THE INTERIOR

Bureau of Reclamation

BOULDER CANYON PROJECT

Arizona-California-Nevada

CONTRACT FOR DELIVERY OF WATER

THIS CONTRACT made this 9th day of February, 1944,

pursuant to the Act of Congress approved June 17, 1902 (32

Stat. 388), and acts amendatory thereof or supplemental

thereto, all of which acts are commonly known and referred

to as the Reclamation Law, and particularly pursuant to the

Act of Congress approved December 21, 1928 (45 Stat.

1057), designated the Boulder Canyon project act, and acts

amendatory thereof or supplementary thereto, between THE

23a

Appendix E

UNITED STATES OF AMERICA, hereinafter referred to

as “United States,” acting for this purpose by Harold L. Ickes,

secretary of the interior, hereinafter referred to as the “secretary,”

and the STATE OF ARIZONA, hereinafter referred to as

“Arizona,” acting for this purpose by the Colorado river

commission of Arizona, pursuant to chapter 46 of the 1939

session laws of Arizona,

WITNESSETH THAT:

EXPLANATORY RECITALS

2. WHEREAS, for the purpose of controlling floods,

improving navigation, regulating the flow of the Colorado

River, providing for storage and for the delivery of stored

waters for the reclamation of public lands and other beneficial

uses exclusively within the United States, the Secretary

acting under and in pursuance of the provisions of the

Colorado River Compact and Boulder Canyon Project Act,

and acts amendatory thereof or supplementary thereto, has

constructed and is now operating and maintaining in the main

stream of the Colorado River at Black Canyon that certain

structure known as and designated Boulder Dam and

incidental works, creating thereby a reservoir designated

Lake Mead of a capacity of about thirty-two million

(32,000,000) acre-feet, and

3. WHEREAS, said Boulder Canyon Project Act provides

that the Secretary under such general rules and regulations,

as he may prescribe, may contract for the storage of water in

the reservoir created by Boulder Dam, and for the delivery

of such water at such points on the river as may be agreed

24a

Appendix E

upon, for irrigation and domestic uses, and provides further

that no person shall have or be entitled to have the use for

any purpose of the water stored, as aforesaid, except by

contract made as stated in said Act, and

4. WHEREAS, it is the desire of the parties to this contract

to contract for the storage of water and the delivery thereof

for irrigation of lands and domestic uses within Arizona, and

5. WHEREAS, nothing in this contract shall be construed

as affecting the obligations of the United States to Indian

tribes,

6. NOW, THEREFORE, in consideration of the mutual

covenants herein contained, the parties hereto agree as

follows, to wit:

DELIVERY OF WATER

7. (a) Subject to the availability thereof for use in Arizona

under the provisions of the Colorado River Compact and

the Boulder Canyon Project Act, the United States shall

deliver and Arizona, or agencies or water users therein, will

accept under this contract each calendar year from storage

in Lake Mead, at a point or points of diversion on the

Colorado River approved by the Secretary, so much water

as may be necessary for the beneficial consumptive use for

irrigation and domestic uses in Arizona of a maximum of

2,800,000 acre-feet.

(b) The United States also shall deliver from storage in Lake

Mead for use in Arizona, at a point or points of diversion on

R

2

ES

=

;

25a

Appendix E

the Colorado River approved by the Secretary, for the uses

set forth in subdivision (a) of this Article, one-half of any

excess or surplus waters unapportioned by the Colorado

River Compact to the extent such water is available for use

in Arizona under said compact and said act, less such excess

or surplus water unapportioned by said compact as may be

used in Nevada, New Mexico, and Utah in accordance with

the rights of said states as stated in subdivisions (f) and (g)

of this Article.

(c) This contract is subject to the condition that Boulder Dam

and Lake Mead shall be used: First, for river regulation,

improvement of navigation, and flood control; second, for

irrigation and domestic uses and satisfaction of perfected

rights in pursuance of Article VIII of the Colorado River

Compact; and third, for power. This contract is made upon

the express condition and with the express covenant that the

United States and Arizona, and agencies and water users

therein, shall observe and be subject to and controlled by

said Colorado River Compact and the Boulder Canyon

Project Act in the construction, management, and operation

of Boulder Dam, Lake Mead, canals and other works, and

the storage, diversion, delivery and use of water for the

generation of power, irrigation and other uses.

(d) The obligation to deliver water at or below Boulder Dam

shall be diminished to the extent that consumptive uses now

or hereafter existing in Arizona above Lake Mead diminish

the flow into Lake Mead, and such obligation shall be subject

to such reduction on account of evaporation, reservoir and

river losses, as may be required to render this contract in

conformity with said compact and said act.

26a

Appendix E

(e) This contract is for permanent service, subject to the

conditions stated in subdivision (c) of this Article, but as to

the one-half of the waters of the Colorado River system

unapportioned by paragraphs (a), (b) and (c) of Article III of

the Colorado River Compact, such water is subject to further

equitable apportionment at any time after October 1, 1963,

as provided in Article III(f) and Article III(g) of the Colorado

River Compact.

(f) Arizona recognizes the right of the United States and

the State of Nevada to contract for the delivery from storage

in Lake Mead for annual beneficial consumptive use within

Nevada for agricultural and domestic uses of 300,000

acre-feet of the water apportioned to the Lower Basin by the

Colorado River Compact, and in addition thereto to make

contract for like use of 1/25 (one twenty-fifth) of any excess

or surplus waters available in the Lower Basin and

unapportioned Ly the Colorado River Compact, which waters

are subject to further equitable apportionment after October

1, 1963 as provided in Article III(f) and Article III(g) of the

Colorado River Compact.

(g) Arizona recognizes the nghts of New Mexico and Utah

to equitable shares of the water apportioned by the Colorado

River Compact to the Lower Basin and also water unapportioned

by such compact, and nothing contained in this contract shall

prejudice such rights.

(h) Arizona recognizes the right of the United States and

agencies of the State of California to contract for storage

and delivery of water from Lake Mead for beneficial

consumptive use in California, provided that the aggregate

27a

Appendix E

of all such deliveries and uses in California from the Colorado

River shall not exceed the limitation of such uses in that

State required by the provisions of the Boulder Canyon

Project Act and agreed to by the State of California by an

act of its Legislature (Chapter 16, Statutes of California of

1929) upon which limitation the State of Arizona expressly

relies.

(i) Nothing in this contract shall preclude the parties hereto

from contracting for storage and delivery above Lake Mead

of water herein contracted for, when and if authorized by

law.

(j) As far as reasonable diligence will permit, the water

provided for in this contract shall be delivered as ordered

and as reasonably required for domestic and irrigation uses

within Arizona. The United States reserves the right to

discontinue or temporarily reduce the amount of water to be

delivered, for the purpose of investigation and inspection,

maintenance, repairs, replacements or installation of

equipment or machinery at Boulder Dam, or other dams

heretofore or hereafter to be constructed, but so far as feasible

will give reasonable notice in advance of such temporary

discontinuance or reduction.

(k) The United States, its officers, agents and employees

shall not be liable for damages when for any reason

whatsoever suspensions or reductions in the delivery of water

occur.

(1) Deliveries of water hereunder shall be made for use within

Arizona to such individuals, irrigation districts, corporations

28a

Appendix E

or political subdivisions therein of Arizona as may contract

therefor with the Secretary, and as may qualify under the

Reclamation Law or other federal statutes or to lands of the

United States within Arizona. All consumptive uses of water

by users in Arizona, of water diverted from Lake Mead or

from the main stream of the Colorado River below Boulder

Dam, whether made under this contract or not, shall be

deemed, when made, a discharge pro tanto of the obligation

of this contract. Present perfected rights to the beneficial

use of waters of the Colorado River system are unimpaired

by this contract.

(m) Rights-of-way across public lands necessary or

convenient for canals to facilitate the full utilization in

Arizona of the water herein agreed to be delivered will be

granted by the Secretary subject to applicable federal statutes.

POINTS OF DIVERSION: MEASUREMENTS OF WATER

8. The water to be delivered under this contract shall be

measured at the points of diversion, or elsewhere as the

Secretary may designate (with suitable adjustment for losses

between said points of diversion and measurement), by

measuring and controlling devices or automatic gauges

approved by the Secretary, which devices, however, shall

be furnished, installed, and maintained by Arizona, or the

users of water therein in a manner satisfactory to the

Secretary; said measuring and controlling devices or

automatic gauges shall be subject to the inspection of the

United States, whose authorized representatives may at all

times have access to them, and any deficiencies found shall

be promptly corrected by the users thereof. The United States

29a

Appendix E

shall be under obligation to deliver water only at diversion

points where measuring and controlling devices or automatic

gauges are maintained, in accordance with this contract, but

in the event diversions are made at points where such devices

are not maintained, the Secretary shall estimate the quantity

of such diversions and his determination thereof shall be

final.

CHARGES FOR STORAGE AND DELIVERY OF WATER

9. No charge shall be made for the storage or delivery of

water at diversion points as herein provided necessary to

supply present perfected rights in Arizona. A charge of 50¢

per acre-foot shall be made for all water actually diverted

directly from Lake Mead during the Boulder Dam cost

repayment period, which said charge shall be paid by the

users of such water, subject to reduction by the Secretary in

the amount of the charge if it is concluded by him at any

time during said cost-repayment period that such charge is

too high. After expiration of the cost-repayment period,

charges shall be on such basis as may hereafter be prescribed

by Congress. Charges for the storage or delivery of water

diverted at a point or points below Boulder Dam, for users,

other than those specified above, shall be as agreed upon

between the Secretary and such users at the time of execution

of contracts therefor, and shall be paid by such users;

provided such charges shall, in no event, exceed 25¢ per

acre-foot.

RESERVATIONS

10.. Neither Article 7, nor any other provision of this contract,

shall impair the right of Arizona and other states and the

30a

Appendix E

users of water therein to maintain, prosecute or defend any

action respecting, and is without prejudice to, any of the

respective contentions of said states and water users as to

(1) the intent, effect, meaning, and interpretation of said

compact and said act; (2) what part, if any, of the water used

or contracted for by any of them falls within Article III(a) of

the Colorado River Compact; (3) what part, if any, is within

Article III(b) thereof; (4) what part, if any, is excess or

surplus waters unapportioned by said Compact; and (5) what

limitations on use, rights of use and relative priorities exist

as to the waters of the Colorado River system; provided,

however, that by these reservations there is no intent to

disturb the apportionment made by Article III(a) of the

Colorado River Compact between the Upper Basin and the

Lower Basin.

DISPUTES AND DISAGREEMENTS

11. Whenever a controversy arises out of this contract, and

if the parties hereto then agree to submit the matter to

arbitration, Arizona shall name one arbitrator and the

Secretary shall name one arbitrator and the two arbitrators

thus chosen shall meet within ten days after their selection

and shall elect one other arbitrator within fifteen days after

their first meeting, but in the event of their failure to name

the third arbitrator within thirty days after their first meeting,

such arbitrator not so selected shall be named by the Senior

Judge of the United States Circuit Court of Appeals for the

Tenth Circuit. The decision of any two of the three arbitrators

thus chosen shall be a valid and binding award.

3la

Appendix E

RULES AND REGULATIONS

12. The Secretary may prescribe and enforce rules and

regulations governing the delivery and diversion of waters

hereunder, but such rules and regulations shall be

promulgated, modified, revised or extended from time to time

only after notice to the State of Arizona and opportunity is given

to it to be heard. Arizona agrees for itself, its agencies and water

users that in the operation and maintenance of the works for

diversion and use of the water to be delivered hereunder, all

such rules and regulations will be fully adhered to.

AGREEMENT SUBJECT TO COLORADO RIVER

COMPACT

13. This contract is made upon the express condition and

with the express covenant that all rights of Arizona, its

agencies and water users, to waters of the Colorado River

and its tributaries, and the use of the same, shall be subject

to and controlled by the Colorado River Compact signed at

Santa Fe, New Mexico, November 24, 1922, pursuant to the

Act of Congress approved August 19, 1921 (42 Stat. 171),

as approved by the Boulder Canyon Project Act.

EFFECTIVE DATE OF CONTRACT

14. This contract shall be of no effect unless it is

unconditionally ratified by an Act of the Legislature of

Arizona, within three years from the date hereof, and further,

unless within three years from the date hereof the Colorado

River Compact is unconditionally ratified by Arizona. When

both ratifications are effective, this contract shall be effective.

32a

Appendix E

INTEREST IN CONTRACT NOT TRANSFERABLE

15. No interest in or under this contract, except as provided

by Article 7(1), shall be transferable by either party without

the written consent of the other.

APPROPRIATION CLAUSE

16. The performance of this contract by the United States is

contingent upon Congress making the necessary

appropriations for expenditures for the completion and the

operation and maintenance of any dams, power plants or

other works necessary to the carrying out of this contract, or

upon the necessary allotments being made therefor by any

authorized federal agency. No liability shall accrue against

the United States, its officers, agents or employees by reason

of the failure of Congress to make any such appropriations

or of any federal agency to make such allotments.

MEMBER OF CONGRESS CLAUSE

17. No Member of or Delegate to Congress or Resident

Commissioner shall be admitted to any share or part of this

contract or to any benefit that may arise herefrom, but this

restriction shall not be construed to extend to this contract if

made with a corporation or company for its general benefit.

DEFINITIONS

18. Wherever terms used herein are defined in Article II of

the Colorado River Compact or in Section 12 of the Boulder

Canyon Project Act, such definitions shall apply in

construing this contract.

33a

Appendix E

19. IN WITNESS WHEREOPF, the parties hereto have

caused this contract to be executed the day and year first

above written.

THE UNITED STATES OF AMERICA

By (s) Harold L. Ickes Secretary of the Interior

STATE OF ARIZONA, acting by and through its

COLORADO RIVER COMMISSION

By (s) Henry S. Wright, Chairman

By (s) Nellie T. Bush, Secretary

Approved this 11th day of Feb., 1944

(s) Sidney P. Osborn Governor of the State of Arizona

34a

APPENDIX F — FINAL DECISION OF THE UNITED

STATES DEPARTMENT OF THE INTERIOR

DATED APRIL 3, 1996

UNITED STATES DEPARTMENT OF THE INTERIOR

BUREAU OF RECLAMATION

WASHINGTON, D.C. 20240

APR 03 1996

CERTIFIED — RETURN RECEIPT REQUESTED

Mr. R. D. Johnson

General Manager

Mohave Valley Irrigation and

Drainage District

P.O. Box 5813

Mohave Valley, Arizona 86440

Dear Mr. Johnson:

By letter dated August 18, 1994, your attorney, Mr. Terrence

S. Leek, appealed the Lower Colorado Region’s

determination dated June 1, 1994, signed by Mr. Robert W.

Johnson, Regional Director. The determination stated that

MVIDD’s contract entitlement of up to 41,000 acre-feet of

Colorado River pursuant to Contract No. 14-06-W-204 is

subject to the Present Perfected Rights (PPR) entitlements

located within MVIDD’s contract service area.

In response to your appeal, this office requested the

Department of the Interior’s Office of the Solicitor to analyze

MVIDD’s contract and the relevant Law of the River. By

memorandum dated February 21, 1996 (copy enclosed), the

35a

Appendix F

Assistant Solicitor, Branch of Water & Power Division of

Land and Water provided this office the requested analysis.

This office has reviewed the analysis and concurs with the

Regional Director’s determination that the PPRs within

MVIDD’s contract service area were subsumed into the

MVIDD contract. This letter constitutes the final decision

of the Department of the Interior on this matter.

Accordingly, the diversion of Colorado River water by well

or from the river for use by PPR holders or MVIDD for use

within MVIDD’s contract service area will be charged

against and limited to MVIDD’s contract water ertitlement.

The PPR holders whose lands are located within MVIDD’s

contract service area who have a contract with the United

States have a superior right over MVIDD’s contractual

entitlement to Colorado River water. In any year that such

PPR holders do not schedule and fully use their PPR water

entitlements, MVIDD, by virtue of its contract, may schedule

and use the unused portion of the PPR contract entitlements,

providing the Colorado River water use within MVIDD’s

contract service area does not exceed MVIDD’s contract

entitlement.

Pursuant to the Law of the River, the Secretary of the Interior

is required to provide qualified PPR applicants water delivery

contracts. For PPR contracts for lands within the MVIDD

contract service area, the PPR contracting process would

include consultation with MVIDD and a copy of each

executed PPR contract would be provided to MVIDD.

Reclamation has received several requests for contracts from

PPR holders within MVIDD and executed one contract for

36a

Appendix F

the PPR which has the identification name “Hurschler” on

March 20, 1984.

If you have any questions concerning this matter, please

contact Mr. Bill Martin of the Lower Colorado Regional

Office at (702) 293-8652.

Sincerely,

s/ Eluid L. Martinez

Eluid L. Martinez

For Commissioner

Enclosure

cc:

Honorable Jon L. Kyl

United States Senate

Washington, D.C. 20510

_ Honorable Bob Stump

House of Representatives

Washington, D.C. 20515

Mr. Terrence S. Leek

Attorney, Leek & Sutherland

126 North Marina

Prescott, Arizona 86301

Mr. William H. Allen

ASL Hydrologic & Environmental Services

1130 East Missouri Avenue, Suite 110

Phoenix, Arizona 85014

(w/cy of encls to ea)

37a

Appendix F

Honorable John McCain

United States Senate

Washington, D.C. 20510

Ms. Rita Pearson, Director

Arizona Department of Water Resources

500 North 3rd Street

Phoenix, Arizona 85004-3903