Appellants Opening Brief — Ivanhoe Irrigation Dist. v. McCracken
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LIBRARY Ses US.
_ SUPREME CcourT. ue i
es Supreme mrt
ei ae ome T. FEY, Clerk .
i : Buited States: es ee 3
‘ me “Ocronen TERM, 1957 , are e
Nos, 122, 123, 124; 125
mR aN ANTIOE LeRi0T10N Disratcr, Tete Fe
vs. pei tii ok Seo BN) 5
Aut, Paras ap Punson, ete t fo ape eigee
Defendants, nN ino
tas STATE.OF Citendbenss. o.
ees ‘Defendant and Appetit, Bes ee
Coursey MoCascxan, Bee Pie on ts
Ta Defendant and Apples, roe
THe Mana. ‘Trrtaation District; ° - o
vs. "Plait ond Aillont, et
Abe Pomsons, ete, aoa, Seer s ns aa ae a
ix thie ee Galea Defendants, &1No123
HE fATE oF : ! ae
: ae Defendant ond Appaan, i 7
Cart F, Srerver, et al. Sb S ee *.
“Tar MADERA en Pye
kate cad pent; Noir
: LRN ot fore. Roa :
a | Od ed depenos, | Bae is
ue 'p iatins ‘aso Prisons, ete, a ie Bg
| __ Defendants, id
Mavmon A. Buln, et al, M2 e ; he
Ditndonsond Apes os
L
“avpeatt from the Supreme Goart of Galifornis, .
: ‘APPELLANTS? OPENING BRIEF.
(Names of Attorzzys appear on inside nies ‘+
ater
+
+ whe
Epmunp G. Brown, pers
Attorney General of the State of California,
B. Asporr’ GOLDBERG, .
Deputy Attorney General.of the.State of California,
ADOLPHUS Moskovirtz, |
Deputy Attorney General of the State of California, .
600 State Building, San Francisco 2, California,
Attorneys for Appellants, The State
of California and The Ivanhoe Irri-
gation District. |
= Davi E. AND DENVER €. PECKINPAH,
1229 “SN” Street, Fresno 21, California, se
fa Attorneys for Appellant, The Madera
es rrigation District.
oe
‘Vern B. THomas, |
‘District Attorney of the sian of Santa bi bara,
State of California, | :
- Francis Pricer, ,
’ 21 E. Canon Perdido Street. Santa Bar bara, California,
Attorneys for. Appellant, The Santa
Barbara County Water Agence y
‘Subject Index
© co
: Wik ,% Page
Opinions below ...... Ree PP ey oe eiiretens EERO RON Ee ee
Jurisdiction eae ce ae AS rani ee
a There i is no. procedural obstacle to jurisdiction ghaekjee - &
Il. The validation proveedings required by Federal inv
£ are cases or controversies within the meaning of Article
TI of the Constitittion -..... eS eae eakteteeiegecs 8
RATA IDWS 8 one el ip decenen ss cranes prin! Se
Questions presented ......... ative : a baa oop.
Statement of the cases ....°....... Perret yy ree For Nee
_L. The ¢ases and the contracts .......... ores wer anes ee
II. The reasoning of the California OHO whi vcneans i ere
Summary of the argument STE TE CEck eee eee ove res ae
Argument bavuaees acces devnedveveseweesavncsspeeceuss nok: ae
I. The decisions rest solely on. Federal grounds . taeeeees 28
A. The possible State grounds of invalidity were re-
jected bythe California court ..... Saguevunssns's 29
B. Only Federal grounds are common to the Ivanhoe
and Santa Barbara CASES o.oo ee eee mee cece eee Sti
C. - The grounds of invalidity are ail Federal ....... 31
1, Invalidity of Fedetal laws ...2....... iaicts ae
2: If the Federal laws were valid the contracts
would be ie Sta preces Soar 337
Invalidity of the contracts under Federal law 35
4. Invalidity of the contracts because of possible
interpretations ‘eewes PP te, eer oe we OT
D. Inter-action of State and Federal laws 1 raises }ed-_
Poniy® -_ eral questions reer crore ry fe Peete tenner eens 38 .
TI. These cases are properly appealable © ...../.......... 39
| eer ry Supsect Ixpex
TT. — water dislivexy restrictions are WHEE oa i <ceus% ether cme
A. Federal law requires inclusion of the acreage limi-
tation in these contracts ....... eh iw a a cite css. aw.
, * The plain language of Section 46 requires the
' Ifinjtation Mea tae OE i EE pe POD PP . 43
2. Section 46 ont inties the original ‘and: ge neral
-p SRMME: baneees ceeds coe Se «erg emer 45.
3. “The general policy applies unless expressly -
, -- altered by Congress:......... eek et adt ews 47
4. Congress has refused to adopt a special poli iey
*. _ for the Central Valley. project ............... , 49..
-B. The 160° acre water limitation‘ is a constitutional
- means of achieving widé distribution: of the Fed-
_ eral subsidy involyed 1 im the delivery of irrigation
water from Federal: -reolamiation projects . cranes - §2
7 The constitutional justification for the limita:
eee eer Yo eree ha ers Sas ho 52
2. Analysis.of the California court’s holding of
. invalidity Pontes cae cakes ox. eee: tees, 54
‘3. The sole justification for existence of” the trust
in water of the State announced by the Cali-
fornia court Is to invalidate the limitation 56
4. The efféet of Section 8 of the Reclamation Act
of-1902 on the power of the United States to
‘apply the limitation and obtain the necessary —
De ee ieee ees one
5. The limitation does not deprive owners of |
excess land of any inchoate beneficial water |
rights owned by them without due process of
Jaw and does not deny them the equal pro-
tection Of the lAWS 2... Fee eee ese ee ete e eens 61
6. Section - 46 of the Omnibus: Adjustment Act .
of 1926 is an “applicable” ‘and “relevant” Act
of Congress undér California Water Code See- :
tions 23197 (4) and 23200 .. 0... .ic..0.. 000. 63
Ye
_?
wet .” . Bopasor inbex a | 2
Page
RY. The provisions of the contracts relating to water de-
livery and payment are valid ............ er teteees ee
-
A.. These provi isions cartes: litetally with Federal
eee eee Voor eweeseaeeeees une s ee te eevee couse
B.* Analysis of the objections of the California court :
to the water delivery and pay ment provisions _ a
(..-Federal law does not require that .a ‘water sup-
piy contract under Seetion 9(e) of the Recla-
mation Project Act. of 1939 contain a construc-
“tion obligation for repayment by ‘the district in
‘40 years™,......... FEEL waherns cake x cei e ve 4 72
D. ‘Federal law is not violated by the fact that the
-, water delivery provisions of the contracts may
not be in eonformance with State laws and regula-
tions concerning the control of public utilities 79
—. The water delivery provisions of the contracts do
“not reserve to the United States the right arbi-
trarily to diseorntinue water delivery at the end. 7
_. of the contract term ..... a Owe, aa ceeroKn wate -- &
-. VY. The provision of the contracts respecting title to works »
is valid ........+-..e00e: SEES Ae a ene Pm me 86
. id ie ;
Comelusion - <i. 02s ececcvescccsseceues betvavies weveesyes 91
rnevereernenny,
~
Index to Appendix
2 : _ Appendix A : Page
~ Reclamation Act of 1902 (32 Stat. 388) . cease genes Sores pet .
: - Appendix B x tate i .
Omnibus Adjustment Act of 1926 (44 Stat: 636) ..... er, 95
3 ae Cc
Act of August 26, 1937 (50 Stat. 744) See dawtiy al ueeoal -
daciaiie dD ;
Reclamation Project: Act of 1939 (53 Stat. 118% ete error 99 ,.
at aes
‘Act of July 2; 1956 (70 Stat. 483, 43 U. S. C. A.see. 485h-1
(1956 Suipp.)) ...:+5 ee tueeareeeis Pe nesecevers ‘eeeeeseee 105. |
Appendix o “erg :
California Irrigation District Federal Cooperation Law (Cali- | |
fornia Water Code, Division 11, Part 6, Chapter 2) ..:... 109
_ Appendix G
Santa Barbara’ County Water Agency Act. (Calif, Stats. 1945,
ch. 1501, p. 2780; as amended by Calif. Stats..1949, ch. 12.
p. 24,°1 Deéering’s Calif. Water Code -Ann., Act 7303
(19! a4), West Calif.. Water Code App. 3851-6, 51-6.3, and
51-11.10) -...... Deeper aees ec ree 118
| | « Appendix H
California Water Code Section 99950 - Sen ticagesenes ‘see eees Me i: oa
Sant honed 2 ? =
California Ww ater Code, Division 11, Part 5 ; Chapter 4 ...... 118
®
a
'’ Table of Authorities Cited
7 . Cases* . - a oh Pages’
Albonico v. Madera Irr. Dist: | , : ous wae
- 47 Cal.2d 693 : 306 P.2d 894, - AJS 180 ..:... . 2
47 Cal.2d 697-698, . 306 P.2d.896, _ AJS 183 ....14, 16,29
Allen v. Railroad Commission: _ Ce een oe
179 Cal. 6B, 176: P. 466 (1918) «oes vee ie en capone 24
Central Irrigation District, Ih re: ’
‘117 -Cal. 382, 49 P. 354 (1897) ...... enaviwe’ ie ®
Federal Power Commission vy. Niagara Mohawk Power Cory.:” , °-
347 U.S. 239 (1954) -......... aca rahe a deun Oral doe - . 95
Federal Power Commission v. Oregon: ee 3
MD UW -G CSO isso ke i ko 5 aa ei 20, 24
Fidelity National Bank v. Swope: .
ee ek a OEE) os opr deerese et Gileeek ade suns 6, 7
Flournoy v. Wiener: | yes
901 US 950.1104)... 6-6 50255. Bor posta ataeacnd 3, 38, 39.
Henkel v. United States: - . seat aa gi,
937 U.S. 43 (1915) ......... agate: oaaeate oe ae
Hollywood C. of ©: v. Railroad Comm. : =e , |
192 Cal. 307, 210) ae |} cbeeee wa oe ee
Hopkins Savings Ass'n v. Cleary: | :
296 U.S, 315 -(1935)-........-65-. ee Cer ee ere 40
Hurley v.. Kineaid: © | eure .
- 285 U.S, 95 (1982) BPO ee eee aS Te watyeereecses 22
Ivanhoe Irt. Dist. v. Alj- Parties: . <A ae hue
47 Cal.2d 597, 306 P.2d 824, Bue Bose ssens 2
47 Cal.2d 606-607, 306 P.2d 829, ge rer ers eae 7
47 Cal.2d 618-619, 306 P.2d 836, AJS 19-21 .5....° 22
47 Cal.2d 620, 306 P.24837, - AJS 2 ......... 34
- 47 Cal.2a623;. ~~ 306 P.24839, °° . AIS 27 ...:..... 21/
_ 47 Cal.2d 625, 306 P.2d 840, <AJS 30 ..... ns 5A :
*The abpreviation AJS refers: to: the- Appendices to the Jurisdjétional
Statement. The Fvanhoe, Madera, Albonico arid Santa Barbara opinions of
“the California Supreme, Court have not been reprinted in the Record
(R. iii; iv; v),, but are reprinted in the Appendices-to the Jurisdictional |
Statement. art cy
ie) Ck 7 ‘TaBie or AuTHORITIES CITED ;
Ivanhoe Irr. Dist. v. All Parties: ; Pages |
» 47Cal.2d625, 306 P.2d84t, . “AJS 30 ........ 19
47 Cal.2d 626, 306 P.2d 841, AJS 31 .. 85, 56
47.Cal.2d 626,- 306 P.2d 842, AJS 31-32 .. “19. -
47 Cal:2d 626,- 306P.2d841, . .AJS 32 .2.... 55
47 Cal.2d 627, 306 P.2d 841, Age S203 .:::.. 56
47 Cal.2d 627, - 306 P.2d 841, AJS- 33 .......,19, 56
47 Cal.2d 627-628, © 306 P.2d 842, «. AJS 33-34......: 58
47 Cal.2d.627-628, 306 P.2d 841-842, AJS 33-35 ...... 19,
47 Cal..2d 627-628, .306,P.24 842, “ AJS 33-35 ...... 58 ..
47 Cal.2d 628,°. 306 P.2d 842, AJS 34 ........ - 58
47 Cal.2d 628, 306 P.2d 842,- AJS 35 ........ 19, 58.
47,Cal.2d 628-629, 306 P.2d 842-843, AJS. 35 ........ «BB
47 Cal.2d 630, 306 P.2d 843, AS 87-38 ..:....98,32°
47 Cal.2d 630, 306 P.2d 843-844, AJS 38 ........ 29
47 Cal.2d 630-631, 306,P.2d 843-844, AJS 38 ........ » TI
47 Cal.2d 630-631, 306 P.2d 844, AJS 3839 ...:.. i...
47 Cal.2d 630-631, 306 P.2d 844, . AJS 38-40...... 11°
47 Cal.2d 631, 806 P.2d 844, - ATS 38-40 °..19, 33n.4.
47 Cal.2d 631, 306 P.2d 844, p pp ern: Ware 86, 87
-47 Cal.2d 631, * 306 P.2d 844, | AJS.39-40 .....°-- 87.
47 Cal.2d 631, - 306 P.2d-844, may 11
- 47 Cal.2d 632, 306 P.2d.845, AJS 40-41 ..:... 41
47 Cal.2d 636, . 306P.2d847, AJS 46 ........ 19°
47 Cal.2d 636, 306 P.2d 847, AJS 46-47:...... 30; 65
47 Cal.2d 636-638, 306 P.2d 847-848, AJS 46-49 ..... 56
47 Cal.2d 636-639, 306 P.2d 847-849, AJS 46-49 ...... 18
, 47 Cal.2d 636, 306 P.2d 847, .-: AJS 47 .......: 10, 34.
“4. 47 Cal.2d 637, 306 P.2d-848, i - aeepaaeaee 21
47 ©al.2d 637, 306 P.2d 848,... AJS 48 ......:. 19, 55
47 Cal.2d 637-638, 306 P.2d 848, AJS 48 ......... 10
47 Cal.2d638, | 306P.2d848,° AJS.49 ....0.. 10
- 47 Cai.2d 638, ‘306 P.2d 848-849, AJS 50 ....5... 41
47 Cal.2d 638, 306 P:2d 849,. | AJS 50 -..%..... 41
- 47 Cab2d 638-639, 306P.2d849,° AJS 50 ...... 9, 18, 41.
47 Cal.2d 689, ~~ 306P.2d849, AJS 50-51 ...... 10, 55
- 47Cal.2d 639, ,. 306 P.2d 849, AJS 51 *.10, 33, 34,55,> .
f : Taos | | | 56, 58,.64
47 Cal.2d 639-640, 306P.2d849, © AJS 52....:.... 86
47 Cal.2d.639-640, 306°P.2d 849-850, AJS 52 ........ 1. .
: 47 Cal.2d 640,- ~~ 306 P.2d849, AJS 59...18, 19 33n.4.
“4
Ivanhoe Irr. Dist. v. All Parties:
47 Cal.2d 646,
-47.Cai.2d 641,
; 47 Cal.2d 641-642, .
47 Cal.2d 641.643,
306 P.2d 849-850,
306 P.2d 850,
306 P.2d 851,
306 P.2d 850-851,
47 Cal.2d 688-689, 306 P.2d 890,
TABLE OF AUTHORITIES @ireD ss
AJS 5s
AdS_!
AIS:
AJS £
Vil
| ‘Pages
OR Save: 11, 35, 72
- eee 12
54-56... 0.0 2
SE TEE 2
47 Cal.2d 642, 306 P.2d 851,. BID skeen: 36
- 47 Cal.2d°642,. 306, P.2d 851, AJS 55-56 ..11, 18, 36,
Se A Rept Coma “eee:
47 Cal.2d 642-643, °306 P.2d 851, AJS 56% <<... 18
47 Cal.2d 643,. 306 P.2d.853, - AdS 56 .,...1243, 37, ©
pore pages = cH oa 72, 82
47 al. 2d 644, 306 P.2d 852,» AJS 58-59 ...... = 92
47 Cal.2d 644, 306 P.2d 852, ce ee ee 81.
47 Cal.2d 645, 306 P.2d 853; | AJS 59-°;...-7.. 10, 18
47 Cal.24°646-647, 306-P.2d 854, ro Seer 17, 29.
47 Cai.2d 647-648, 306 P.2d 854, fr? ¢ Lr a
47 Cal.2d 648, 303 P.2d854, - AJS 63 ..-..:.. - 88
47 (al.2d 648, 306 P.2d 854, AJS 63-64 ...:.: 19,
47 Cal.2d 648, 306 P.2d 854-855, AJS 64 .....¢.. 37, 72
47 Cal.2d 658, 306 P.2d 861,. ADB TOTO ose - 62
47 Cal.2d 658,* .. 306 P.2d 861, ‘“AJS 79 ...:....54, 60 »
47 Cal.2d 658, — - 306 P.2d 861, AJS 79-80 .:..., 52
47 (al.2d 662; —- 306 P.2d 864, Ads 656 ...;..: ———
Jett Bros. Co. 'v -City 6f Carrolton:.
TE Byes rrtis Fre eins 62s Sek eke ceke 39
Kalb v. Feuerstein: .
sd: I ee I © x ook cd cs a kes bch eh gen se 40
Lawrence y. State Tax Comm: :
Me SOME SE CU Ph gs is oe sev res Pat ete 82
Madera Irr. Dist. v. All Persons: ae
47 Cai. 24681, 306 P.2d 886, cS: are 9
- 47-Cal. 2d 686, 306 P.2d 889, .. AJS 148 ....... 83
47 Cal. 2d 687, 206 P.2d 890, AJB 145°....06. 29
47-Cal.2d 687-688, 306 P.2d 890, AJS 145 5.....4 - @
47 Cal.2d 688, 306 P.2d890,,, AJS 145 ..;.37, 56, 71,.
ia : : : 72; 82
rs %. ” Speeer 57
, viii | : Tape or AuTHoRITIESs CITED -
Madera Jrr. Dist. v. All- Persons: : mas | | Pages
_ 47Cal.2d 693, | 306P.2d892; = =AJS 50-151 .... . 57
47 Cal.2d 692-693, 306 P.2d 893, ASO WS ciccacs!
' 47 Cal.2d 693-694, 306 P.2d 893-894, AJS 193-154 . +, .17, 29
47 Cal.2d-694, 306-P.2d 894, ~ AJS 154 ...... .14, 29
ae
«Market Street R. Co. v: Comm. : Stace yg ioe see
324, Ai We (BOO) Gomis ys cto exes sedan emus vee 5
Woncusabhie Navigation Co. v. U nited States 66
148 U.S, 312 (1893) ....... Creer s UN heueceeeteetee <ae
‘Nebraska v. Wyoming: ree fees , 7 A ey
325 U; S. 588 (1945) tei cece cece g cere gece reer. 24, 60, 80
New York-v. United States : | e
*, 826. US. 572 (3946) 656.6 ees cues Vier rae e.. 8&4
People v. Linda Vista Err. Dist: :” eo tt. | fey ;
128 ‘Cal. 477, 61 P. 86 eed a ee Pere: ee alles ve 7
Petrie v. Nimite ete. Irrig. Dist. : ay 7
248 U:8. IGA (1918) o.oo eee ee ence nels ' 6
Red Cross Line v, Atlantic Fruit Co.: | Pi, 7%
264 U.S. 109 (1924) iNeed e chert Seetlnerveaecssasnee 2
Santa Barbara County Water Agency y. All, Persons: — -
47 Cal.2d 699, 306 P.2d 875, | “AJS 205°:,...... 2
47 Cal.2d 703; - 306P.2d 878, -- AJS 206 ....... 7
47 Cal.2d 707-713, 306 P.2d 880-884, AJS 211-221..... ~ 29
47: Cal.2d 711-713, 306 P.2d 883-834, - AS SSS - “ d7
47 Cal.2d. 713, 306 P.2d 884, ~ AJS 221. .12, 14, 17, 29,
aga ee : 31, 37, 40, 82
47 Cal.2d 713-714, 306 P.2d B84, - AJS , - > 17, 29
Smith v. Kani City Title & Trust Co. : re ie \ -
255 U. . 180 (WORRY nse x. tepeeevedes beeen tees ie geese 38°
~~ g. R. A.,’ Inc. v. Minnesota: te
327 US. 508 it. \ weererorer erry rer errr “he Bl, OO
3tandard Oil of California v. Johnson: . ‘
916-UB,.401 (IOEB) 2. cheese... eet eee tee eetes _ _ 38
Stephan v. United States: - | Me
a a. ae oa oe | ao. 4 @na ace’ 2 rs ae art
TABLEOF AvuTHORItTIES CITED ix
| Steward Machine Co. v.:Davis: ” Paces:
301 US. 548 €1987), ‘20. c ees eee e eee ee eer 63.
; s
Sweezy -v. New Hampéhire : eaten z
304 U.S. 234 (1957). .:...¢. Tew ite pre even ve es eee
ce
‘Tregea v. Modesto Irr. Dist.:
TORU TUNIS 0h hence 1
Tulare Irr. Dist. v. Shepard :. : xe
“YRD U.S. ] (1902 } een €6¢89 66 6 aoe © o-@ © 6 «6 ee ee i : > a ; ese . 6
. ’ ¢ "6 ' : iy e
United States v. Appalachian Power Co. 6
SEF UR Sie CRMGE as erinthe ees vane tanat ae
United “Hates v. Buffalo Pitts Co:
904 US. 228 (1914) 2. ..eecee. Perro ae ae a =
United States v. ‘armack : ae ee Y SPN
920: UB. 20 COBY ici ee 29, 60
United States v. Gerlach Live ‘Stock Co.: a
See Wie, FeO ATID) i ccc civcevegcives 22, 24-25, 43, 52, 58,59
.
United Staies v- Willow River Ce.:
°
Warner v. Goltra:
”
324 US! 499 (1945). 02. cee cee cece ence eee ere eeeee: + 62:
293 U.S. 155 (1934) ......... chat thereat eveges *
Wehrle ve W. & P. Gommrs. :
211 Cai. 70, 293 P. 67 (1980) ......... oe erate 30°
ra
West igs pings v. Sims:
341 U.S. 22 (1951) ole ieee ccee cece cceecue. ee BT, 83
Wicka rd v. Filburn:
817 U.S. 111 (1942) dveve%a hatha ae enwen ahead 62, 63
Wilson v. Cook: | S 3 a tg
327 US, 474 (1946) ...... Feanvenegivighevasise+ ROG ¢
Wissner ¥, Wissner: | -
338 U.S. 655 (1950) .......--..-06- Re bunduenes teaee 840
Woreester } Nat. becpe Ex Parte:
* 279 TA Oe TAO iiiw el vend daciesdeeaxs wetevenes 40
Yearsley v. Ross:
v rs
x TaBLe of AUTHORITIES Cirep
. - Statutes of the United States” - - Pages
-4912, Aug. ¢ 93, ST Stat 266, 43 USC. | eres 46
“1914, Aug’ 93 12, 38 Stat. 689, 43:U. S.C. §418..........46, 47
"1937, May 27,°5 50 i WO seen crevasse 447
1987, Ang. 26, $2, 50 et nee 8,2, 43,49, 59, 97-98
" . 1938, June 16, aie Stat. 764, 43 USC. $386....0..... 48
. 1946, Nov. 29; § a, 54 Stat. THI9, |... eo ee ar
1943, March 10, $2, 57 Stat. 14, 16 U.S.C. §885a...0....... 47.
1949, Ovt. 14, § 2, 63 Stat! 852...........0084 PHN Oe 79
1950, Sept. 26, $2.64 Stat. 1036...... eas Rete yt" ae
1952, June: 27, § 1, 66 WD i A aes co ‘ee
1954, Aug. 2 ie 1:08 ik Oe eS ee
1954,-Sept. 3, §1, 68 Stat. 1190............. Pte ae
1958, Aug. 12, § 1, 69 Stat. 719...........:- 246+ Suethes oc Wee
1956, July 2, 70 Stat. 483, 43 USGA: §485 hl (1956 |
WOOD.) * Wi eis SAREE aa ogee ee erg 8, 66-67, 68, 73, 81, 105-108
SU oe ase sis Sent sien tae et ae ie
Pe aes PERSE OPEL Taka oe ea Fe 77, 85
s RE Se i sd a keh Gee ENSURE Oe eee eons 78, 8}
yt Se eee 4. k eR PTR UOLAREEL HOR OR ART ORR 85 -.
Wes 2 eo cae ct ats be eee es - 81
ONS iv csvct tas a SOE Po Ltac ey, aey) Xs 85 -
1956, Aug. 1, § J(b), 70 Stat. TW... vccvevEleetitee. 47
1956, Aug: 6, § 5 (e) , 70 Stat. 1046 VE Sakae ore aa kee 47
OE Sle Oh TE Biek: DOE. nk nics ote eect cs 47
1957, Sept.’ 2, 71 Stat. 590.0000... eee, ete Ce ou
1957, Sept. 4, 71 Stat. 608.....:.......006. Serta ioe. a
Boulder sp Projeet Act of 1928, 45 Stat. ae, 43
Rip she. Se reer re Serene seer RR AEA BE 8 ¥ 48
<- 45 Stat. 1061, 43°U.S §6lTe. 2: ae eee ass ale > @-
, Interior Department. Appropriation Act of 1927, 44 Stat.
We os eae riaehsv boas Lees 47, 66 |
_—
On
Ret
‘Taste or Auruorities Crrep . xi
Omnibus Adjustment Act of 1926: , Pages -
§ 45, 44 Stat. 648, 438 U.S.C. §423(d)-.....0.....005-. 66
" § 46, 44 Stat. 649, 43 U.S.C. § 423(e}. .3, 5, 8, 9, 14, 16, 18, 25,
Oe ie 32, 34, 40, 43.44, 45, 55, 56, 63, 64, 66, 95-96
48, 4 Stat. 650, 43 USC. T : reir 41
Ree ages ‘Act of 1902: : ys ion
§ 4, 32 Stat, 389, 43 lt ky. Seen PS ELON 66
§ 5,.32 Stat. 389, 43 USC. OK 5 Seppe gs eek eee ~, 8, 45, 93
§ 6, 32 Stat. 389, 43 U.S.C. § 498... ..8, 16, 19, 26, 88,.93-94°
§ 7, 32 Stat. 389, 43 U.S.C. §421...........5. Fates 22,59 °-
§ 8, 32 Stat. 390, 43 U.S.C. §§ 372, 383,..3, 8, 10, 11, 12, 19,
' 94 _ 55, 58, 72, 80, 94
§ 10, 32 Stat. 390, 43 U.S.C. §373..... oh eee Ce 22, 59
Reclamation Extension Act of 1914, §§ 1, 2, 38 Stat. 686-
687, 43 U.S.C. §§ 411, 472, 418: horas v3 Pony ee Pak ee TS 66...
Resttination Project Act of 1939 :
§ 9(a), 53 Stat. 1194, 48 U.S.C. § 485 h (a)... STA Ee 21, 43
§ 9(e), 53 Stat. 1194, i U. S.C. §485:h (e)...3, 8, 12,.13,14,
te, jan | eo. aD’ IO 71 n. 3, 99-100
§ 9(d), 53 Stat. 1195, 43 US oh (d).......8, 66, 67,
: | | 100-103
§ 9(e}, 53 Stat. 1156, 43 USC. § 485 h le) iy, Ay 11, 12,-14,
25. 32, 66, 67, 71 nh. » 42, 103-104
§ 14, 53 Stat. 1197, 43: U.S.C. § 389. ...... Ge RS +59
7 ”
Second Defiviency Act pf 1924: § 4 (F), 43 Stat. bis 43
USC . §§.473, 474 wf... pik ye piksna rien see 42. «666
Warren Act of 1911: : _
_. §1, 36 Stat. 925, 43 WSC 6 $88... .. 45-46
§2, 36 Stat. 926, 43 USC. § 54.5. ee ree - 46
U shod Cia Code, ‘Title 8: F eae
Bese 10} Goes ee eee Hie erates ate tes ease 3, 39.
ee cy error rt Ba AA ate ets eg A 60
oS Gane eee eee, Se einen fae ree ar |
§2101(2) .¢....-- eres re ee Ser eee suman 4 =. >
§ 2403 Pee ty pe ecient aE eS teens = / sewn BASE pegs 3
xii | TABLE OF. Avruonrring Crrep
a Statutes » af California
Civil Code: ae ; . Pag
EE < c2 40% cle bo bake oes Ga eee eae PER ae epee - §
aa a hake Ra RA ee ee EARS CAE nee §
Cuma, 0, BE 48 oe oe ce es Fees -
Santa Barbara County Water Agency Act, Calif. Stat. 1945,
e. 1501, p. 2780, ‘as amended by Calif. Stats. 1949, ¢: 12,
p. 18; 1 Deering’s California Water Code Ann., Act 7303,
West Calif. Water Code, Ayoemart Ol. . .se5 rs v0. *, 9, 113-1)
OE Ta PPR, PERT RD ORE ri ener ag Le ....3, 10, 16, 36,4
cS eee Nan so ANS Sa Phy SPARE
Weg oe ok Seer as ose Ucn ae
os oy fe ee iclca ave eee ;
oo giv bk sata oe soa vex eres a
Water Code: Shag,
BE oie. cxtet cc eteee Ne ee ~. 9, 80, 34, 65, 1.
§§ 22670-22684 ........ neg Kees Soreness set 5, 9, 118-1:
§§ 23175-23197 ...'.:.... NE Dlr Ge ee x 63, 109-1
I occ 9 casa cca ES SRS 5 RS ea 3, 10, 16, 38,
§§ 23195 et) seq. ......... Sa atte) ates PR OME AR Lr coer glpet f
es cb ec Coates eee kee 2p 36, |
§IW (ge)... <2 552 ne as PRET eorey se Pav ateasmus ie (
a PREMIER ey GAS Cea heeded eee/edces ea dae ca tee ea 3, 16, :
SR OY cae eee ee a ee 10, 63, 64, |
$23200 ..... nega Pers - 8,8, 10, 16, 38, 56, 63, 63-64, 64, 65, 1
(ae Sig OW Serer y ae sre 5, 8, 111-1
§§ 30000 et seq. ...:....:.. SE ie LPS bs
yee ere ee oe fh ee Ort mt OTE ES
i eee asians aa alia eeacveesnees deter eas
§ 31701 ....... Sey anne ous baa ns areuaiot ay ee bier, s2
Supreme Court’Rules rf
Rule AL, par: Doo. feet geecesceces errr ee Ry Sep
Rule 16, par. 4..... Ben en iter tag Os CNN ees seed,
Rule 40, par. (b) 3.2.00...) Serres perc me ey eee
TABLE GF AUTHORITIES CITED _ - Xiij
Legislative Maierials - + Pages
81 Coing/ Ree. 3905, 4509, » 4516. 4540, 4548, 4561, 6704
ee le aaa! Si es ee 49
H. R. 396i, 78th onic Me er er oa. erea< . 650
H.R. Doc. No. 146, 80th Cong. Ist Sess. (1947) (Central
Valley Project) : es a ye ae 5,
Me ae wverea cs 45 « Sat aoe Sing PRED oye Ee aw 69
ee eee ay a euew cue eX oe cee Ys okeces . 69
ie OE os orca ivi ia re erties. at erenae _ §2
pp.: 17-22:...... iabetrsbgrers es en eh SO 69
H.R. Doe. No. 587, 80th Cong. pa Sess.: (1948), ‘(Santa ner
hara Projegh) ReeWUiAeneyettnesecnéiaees eebee ade bee's 43 —
p 22 Vote bl ace wee ioe RS ae ae SS are 69
CGT AGS UP CS RD an ar v2
OF ERE ERS RE eta pe Utara a a ee 69
ee ee Sees rash ch vcs 6a on doce OE 40's 13
Hearings . before House Committee on Appropriations ‘on
H.R. 6958, 75 Cong. Ist Sess. 1597 (1937). ............ 5D
ELR: Rep. No. 1754, 84 Cong. 2d Sess. (1956) :
p. 2 ee eC Se ROE RP ABBE SACO SCHCSeSCSE HP Heese ee ee we aoe 18-75
-pe 6... weer Pais tle age “ne © eo ee we ee ; oy ee ere 2.0.0.0 6a e686 6 Sey 78
HR. Report. Special Subcommittee on Irrigation and Recla-
mation 111-112 (1952) ..... eee scae A ae eee 27.
8. 2217,-84th Cong. 2nd Sess. (1956) ...... had... a
S..413, 85th Cong. Ist Sess. (1957) oe aE 90
Hearings before Senate Committee on Commerce on H.R. |
3361, 78th Cong., 2d Ses oe eee eae Oe em . . 62
Hearings before Subcommittee of Senate Committce on Pub-
lie Lands on 8. 912; 80th ‘Cong.,. ist ‘Sess, (1947) ane ova |
Sen. Rep.*No. 2241, 84th Cong., 2d Sess, 2/1956)... AT
Sen. Rep. No. 2379, 84th Cong., 2d Sess. 2 2 (1956)......... 89
Sen. Rep. No. 291, &5th Cong., Ast Sess. 2 lo ot Free s. OQ
|
Xiv Tape OF Avruoritizs Crrep
Official Letters, Opinions and Reports | Pages
Letter, Hon: Ray Lyman Wilbur to Imperial en Dis- -
trict, Feb. as BONE 600k ous CST ne icewenewe ree 48 -
Opinions, Solicitor of the Department of the Interior:
M.33902, May Bl, a FOES TREE CC ere ie (ee
M-25047, May 4, yr. ere eon Sig's etaleosedenses a
Adams, Irrigation Districts: in California. (State of Calif,,
Division of Engineering, ete., Bull. No. Sone. 199-203
CR ive cecee ieeeens eee PRE Sea FE ae es ae
- California. Districts’ ‘Securities Commission, Report 1954-55
*. (1956). pp, 30-31 | easy lee ewegeeecceesens te es ae aie 27
oe je ie Jamis, Faroe aet oi me. ...15 2°
- Montgomery and Clawson, History of Legislation and Policy
Formation of the Central Valley Project (U.S. Dept.
Agric, Bur. of Agric. Econ. 1946} : Wes
-pp. 133-136 ...... PER EPS UTE E CEE TEE CT ETE OCTET Er
ey: See hos egice¥ lice vaevdes ceveceran ts ween <r 20
ty
Law Reviews and Text .
Note, Supreme Court Review of State Interpretations of
Federal Law Incorporated: by metgrente, 66 Harv. L: a
1498, 11502 -(1953) ..... oe ee stk enue es arees ‘38
Taylor, Destruction | of Federal - Reclamation Policy? The |
Iv anhoe Case, 10 Stanf. L. Rev. 76 41957) : hy
pp.. 92-96 ...... Sere ye aes ees ic ee
pp. 100 et fl... cee 8 eh ES QO EC OE . 45
8 Williston; Contracts, § 620, pp. 1785-6 (Rov' od. 1936).. 83
Sn the Supreme Court
OF THE ;
Anited States —
ved
OvronER TERM, (1957,
Fe enters
Nos. 122, 123, 124, 125
4 "7
eT A ae
THE IVANHOE Teun’ TION DISTRICT,’
Wen ! _ Plaintiff lt sat Sink is Rs
ALL: PaRTIES AND PERSONS, ete., !
: : Defendants, No. $22 ,
THe Srave or CALIFORNIA 1
; Defendant and Appellant, ~
Courtney McCRACKEN, ee
? Defendant : and 7Ee ee.
: THE MaDERA IRRIG ATION -DISTRICT, . :
VS. ‘ Plaintiff and Appellant, |
_ALL PERSONS, ete.,.
| oe Defendants, No. 123
THe Stare or CALIFORNIA, s
: Defendant and Appellant, oe
Can, F. STEINER, et al., |
De fendants and Appeties. |
THe MADERA IRRIGATION DISTRICT, 1.
C. ee Defendant ‘ial Agiilank
Pun. LIP and JANE E. At ALBONICO.
"Plaintiffs and Appellees.
THE Santa Barpara Cou nity WATER AGENCY,
Ys. (Plaintiff and Appellant,
Au PARTIES .AND PERSONS, ete.,
. Ng. 124
Defendants Fee 125
-Mavrice A. Ba LAAM, et al:, ic
: " Defendants and.A Appeltees.
i Appeals frem the Suprenie Court of: California. oe
APPELLANTS’ OPE OPENING BRIEF. Attar
These are. appeals frotn ‘fo “four companion devisic
‘of the California Supreme Court holding fede
“
statutes invalid. Pursuant to these holdings that court
invalidated. three contracts concerning the delivery of
water from two federal. reclamation projects in Cali-
fornia to public agencies of this state.. The questions
involved in these four appeals are closely related.
This court has ordered the cases consolidated’ for
argument (R. 656). He nee, this one brief. is being
submitted by appellants: for, all ried cases.
OPINION s BELOW.
The opinions of the California Supreme Chart are
reported as follows:! . :
- Case No. 122, Ivanhoe Ir. Dist. v. Alt- Parties,
AT Cal.2d 597, 306 P.2d 824, AJ S-1: oe
Case No. 123, Madera Irr. Dist. v. All Persons,
47 Cal.2d 81, 306 P.2d'886, AJS.139;
— No, 124, Albonico v. Madera Trr. Dist., ,
47 Cal. Dd 699, 306 P.2d 894, AJS 180;
Case No. 125; Santa, Barbara County Water |.
Agency v. ‘All Persons, 47 Cal2d 699; 306
P.2d 875, Picts ai, , .
"JURISDICTION.
By its order of October 14, 1957, this court ak
poned consideration of: the question of jurisdiction to .
the hearing of these cases on their merits. Jurisdie-
iThese opinions are reprinted in the Appendices. té Jurisdie-’.
tional Statement. References to the pages of. this reprint are in-
' eluded -with the citations of the opinions -in this brief and are
designated ve: AJS.: '
: 3
tion will, therefore,. be discussed. at the outset of this
brief (Rule 16, par. 4; ef. Sweezy-v. New iine
304 U.S. 23 34 (1957) ), ae
These four appeals are taken ‘pursuant to 28 U.S.€.
§ 1257 (1) on the ground that in each case the validity
of statutes of the United States has been drawn ‘in
oe and the decisions are against their: validity.
Presented with the appealable issues. are a number
of reviewable issues not in themselves. appealable
(Flournoy vy. Wiener, 321 U.S. 253, 263 (1944)). If
' the court should find that there are no appealable™
issues, the reviewable issues .may nevertheless be con-,
sidered as on certiorari (28 U. S. Cc. § 2103).
The. appealable issues: are the validity of section 46
- of ‘the ‘Omnibus Adjustment Act of 1926 (44 Stat. 649,
- 43°U.8.C. §423(e)), and sections 9(c) and 9(e) of
~ the Reclamation. Project Act of 1939 (53 Stat. 1494,
1196, 43 U.S.C, $$ 485 h(e), 485 h(e).).. 7
~The reviewable questions, not capable by themselves
of being brought to this court by appeal, are the inter-"
pretation of the above sections; the interpretation of
section 8- of the Reclamation Act of 1902 732° Stat.
390, 43 U.S.C. $§ 372, 383) + the interpretation of state |
_ law as applied to. the United States because of. the
reference to state law: in section 8; and the interpre- |
tation’ of federal . law as applied to state agencies
beeause of the refe rences to federal law in. California ,
Water Code sections 23195, 23197 and 23200 and sec- ~
tion 6 of the Santa Barbara County Water Agency .
| Act scat Stats. 1945, ¢. 1501, is Beast
4
The possible jurisdictional problems are as follows:
| ae there any procedural obstacle to assuming»
jurisdiction? |
_ 2. Do the three cases which are special validation
proceedings, i.e., Ivanhoe, Madera and Sante Barbara, |
i present cases or controversies within the meaning of :
Article Tit of the Constitution ? | |
3. Do the decisions below rest on an adequate, or,
indeed, any non-federal basis?
4, Which is the proper remedy, appeal or cer:
> tiorari?.
Each of these questions should be answered in favor
of the conclusion that the jurisdiction of this -court
on: ‘appeal has been properly iny oked. ‘The discussion —
of the *hird and fourth questions depends on a con-—
sideenbion as-a whole ofthe opinions of the California
court. It has therefore been ‘postponed until after the
statement of the cases (pp. 28 to 42 herein). But
_ the discussion of the first two questions is brief and
: uncomplicated. It follows immediately.
4 Lon PR TEI a =
I.: THERE IS NO PROCEDURAL OBSTACLE TO JURISDICTION.”
“The time factors upon which jurisdiction rests’?
have been met (Rule 40, par. “(b)) 5
‘The notices. of appeal in each of these cases were -
filed within the ninety days allowed (28 U.S.C. § 2] 1
(ec); Rule 11, par. 1). The decisions of the California .
; Supreme Court in each of the cases were filed on
3. . Lae
r —
January 24, 1957. Rehearings were denied in each on
February 19, 1957, arid the judgments thereby beeame -
final (Market Street R. Ce. v. Comm’n., 324 U.S. 548,
549-552 (194! 2) ). The notices of aataad in Madera,.
Albonico and Santa Barbara were filed on Mar *h 11, |
1957. The notice in Ivanhoe was ‘filed on April 23,
1957. ‘Thus these appe ‘als are in all respects timely,
neither premature nor, tardy.
oe |
=
LAW ARE CASES OR CONTROVERSIES WITHIN THE MEAN-
ING OF ARTICLE III OF THE CONSTITUTION. | oz
_- Section 46 of the Omnibus Adjustment Act\of 1926
provides: ““No water shall be dél vered upon the com-
pletion of any new [reclamation ] project until a con- |
tract. .- shall have been made with an irrigation }
district. . .. and the execution of ‘said contract ..
shall have been confirmed by a decree of a court of
competent jurisdiction” (44 Stat. 649, 43 US S.C. § 423 |
(e))e
“Three of these cases, “ vanho«, Madera ‘and/ ‘Santa
Barbara, are “‘s -alidation”’ or “confirmation’” pro-
ceedings brought to comply with this’ statutory re-
. quirement and the corresponding requirements i in -
contracts (R. 41-42, 218, 504, 535, 567). State
II, THE ann east PROCEEDINGS REQUSRMD BY FEDERAL
_ determine the validity ofa district's contracts (Qalif.
Water Code §§22670 et seq st 23225), and of thé con- |
‘tracts of the Santa Baivara County Water Agency:
and its member linits /\ Santi Rarbara. Count a
specifically authorizes these, special jie Miser igs % a3
6 ‘
o>
Abency Act, § 11.10, ‘Calif. Stats. ‘1945, ¢. 1501, p.
2797). These proceedings resemble. ordinary actions: -
ee a
4°
for declaratory relief.
Confirmation proceedings have. long ‘been known to —
California | ‘aw (In re Central I rrigation District, 117
Cal. 382, 49 Pac. 354 (1897)). They ‘were invented
as a device. to enhanée the attractiveness of district _
obligations by cutting off the right. of the district or
its landowners to theinselves attack the obligations at °
some future date (Tre gea v. Modesto Irr. Dist., 164
U.S, 179, 181 (1896) ; ef. Tulare, Irr. Dist. v. Shepard
185 U.S. 1, 26° (1902)). 3
To ‘our knowledge, va alidation proceedings, as such, -
have been before this court on only three occasions:
| ‘Tregea v. Modesto Err. Dist., 164 U.S. 179 (1896) ;
Petrie v. Nam pa ete. Frrig. Dist., 248 U. S. 15d. (1918) ; |
and Fidelity Natconal Bank v. “Swope, 274 U.S. .123 :
(1927) « There would be -no ‘Giieticn of justieiability
- . except that in Tregea this court. dismissed the case —
/[
on the ground that there. was no case ‘or controversy
(164 U.S. at 189). The question there was ‘whether /
the district had authority: to issue bonds, but the suit °
was brought before. the bonds had been issued and
sh a the seareret had- assamed any ae { 164
yee ew ees
advefsary in character “and 3 was an effort to ‘obtain
to
a merely advisory opinion, aa ae Cee,
In Petrie, howev er, this court refused to. dismiss °
a validation proce eding on the: basis of Tregea (248
U.S. at 157). The district presented a proposed eon-.
7
it
traet with, the United States Reclamation ere ice for |
‘examination, approval and confirmation” (248 U.S,
159). The contract had been approved by the state
court. The writ of error was dismissed on the ground
that ttie decision ylas based on an adequate state
ground rather than on the ground of absénce of a case
had controversy. oo
time 8
x
‘Finally, i in. Fidelity Nat. Bank v. Swope, this court.
held that-a preceeding to validate an assessment was |
a case or centroversy. The proceedings were found
to be judie ‘ial and not legislative or administrative,
and the-reversal of normal parties was held immate- -
rial (274 U.S. at 131). Pregea was distinguished on
the ground that it tested on this court’s Lg cant
of the California: statute (274 U.S. at 133).
- $ eee : . ;
But. since Tregea, the California court has, three
times ‘at least, interpreted the California statute to
provide for a judicial proceeding. Once was in the
Ivanhoe case ‘itself (47. Cal.2d 606- 607, 306 P.2d 829,
AJS 2), again in the. Santa Barbara case (47 Cal. 2d
703, 306 P.2d 878, AJ S 206), and the other was on
~ the first ‘opportunity: after Tregea had -been decided
(People v. Linda : Vista Trr. Dist, 128 Cal. 477, 61
Pac. 86: (1900) ). e an |
“Under these circumstances it is submitt d that the
reasoning of this court in’ Fidelity Nat. Bank. v.
A
seine
Swope shouid control (274 U.S. at 130- 131). Sinee
these proceedings are_ required by law,‘ the collusive
element. whieh this court, inferred, in the’ Tregea ease
_is completely absent. See o TGS. at 133 3, pointing
o-
. id 8
_ out that Tregea was ‘‘not ady -ersary, heaps a.proceed-
_ing by the ‘trustee of t the irtigation .district against oe
the district itself. i ): Furthermore, the: opinion \
here will not be merely | ‘adwisery Hecause the transac- :
‘tions involved are already |, partially exgeuted, not - |
. mere y aay Meer \
a ae ae c ' \" or ;
ahs os : : | . ie sa 0
" STATUTES nivoivap.
“The statutes involved 3 in’ these appeal are set forth
is | the appendix to this brief as follows:
teres Reclamation Act: of 1902, §§5, 6, 8, 32 ae
- 388; 389, 390, 43 U.S.C. §§431, 498, 372, 383,
« one Appendix A, pp. 93- o4 henein: |
".@ Sebtion: 46 of the ‘Omnibus Aajustment Act’ of -
" 1926, A4 | Séat. 649, 43 U.S.C. 64226
at . Appendix B, pp. 95-96 herein. |
“1B. Fetion-2 of the Act of August 26; 1987,, 50
Stat. 850° Appe ndix C, pp. 97-98 herpin.
4. Section 9 (e); (a), and (e) of the Reclama... -
- tion. Project Act of 1939, 53° Stat. 1194, 1195, -
1196, 43 U.8,0. §§485h (©), (d), (e-) |
‘ _ Appendix D, pp. 99- 104 herein. -
Met of July, 2, 1956770 Stat. 483, (1956), 43
x U: S. C.A. §a85h-1 (1956 Supp.) -.
| _. Appendix E, pp. 105: “108. herein. ;
| 6° [rrigation District Federal Cooperation. Law, *.
Pe — Water Code P gasype 23197, 23200,
foe a & 5
Q.. » ee : » , 2 > \
ol | re We > 9 | . :
7. ‘The Santa ‘Biter County ‘Water Agonsy
Act, Calif. Stats. 1945, ¢. 1501, p. 2780, as
amended, by Calif. Stats. 1949, ce. 12, p. 18;
' -§§6, 6.3, nd 11.10; 1 Deering’s California
- Water Code Ann. Act 7303,) West Walif. “s
‘Water Code e App. $651-6; 51-6.3 and 51- 11.10
“Appendix G, pp. 113-116 herein. .
8! ee Water Code: §22250
Appendix H, p. U7 herein. .
9, California Water Code §§22670- 29684
» Boece = PP. 118-120 here ee
“ - QuESTioNS PRESENTED.
; The’ aa " yaised’, “by these: éppenia ‘which: are: ,
gc ee common. to all four cases are as follows:) .. f
: gph. Section 46. of, the Omiibus Adjustment Act of
1926 (44 Stat. 649, '43- U.S. C. §423e) precludes. de-
livery of water from federal reclamation projects to -
-
A
~ larid held in private ownership by any one owner in-
_ excess of 160 irrigable acres unless certain conditions
%,
are We os J
(a) Does this . section attiy only ‘to pabtie
lands. of the United, States or does it also apply ~
%, lands in private sapere (47 Cal. 2d hoon
306 P.2d-849, AJS 50)? GOS
* (b) Dots it. deprive owners of more than 160
acres of land in federal réclamation projects in
California of property without due process of
law, and does it deny them equal protection of
c
~~
10 tp aes
” the laws (47 Cal:2d 636,°637-638, 638, 645, 306 P. :
2d 847,848, 853, AFS 47,48, 49, 593%
; (c) The. California Irrigation District Fed-
| eral: Cosperation - Law and The Santa Barbara ~
County ‘Water Agency, Act provide for\.the de
livery and distribution ‘Of: water acquired undei
any contract with the United. States ‘‘under the —
yelevant acts of Congress” and ‘‘in accordance
with the applicable acts of Congress” bone
Water Code §§23195, 23197 (a), 23200; The S |
: Barbara County Water, Agency. Act, $§6,. 3 i
. Calif. Stats. 1945, c. 1501, pp. 2787, 2788). Is this
section 46 one‘of the ‘‘relevant’’ and ‘‘applicable”’ _ 7
oacts of. Congress _referred fo ‘in these Califoritia a
| canicystis (47 Cal: 2d 639, 306 P. 2d 849, AJS 50-51) ..
. (d) Does the application of ‘this Section’ 46.
presie in any way on whether ‘‘the title to the.
water to *be purv eyed is. for is] not an/unlim-
ited. title in the Untited: States”. (47. Cal. 2a 639,
: 306 P.2d 849, AJS 51)? :
' (e). Does. section 8. of* the Reclamation ‘Act
of 1902 (3% Stat. 390, 4% T. 8.C. §§372, '883)
_ require the United States to deliver water in ac-.
cordance with a. trust under: state law, assuming —
such trust. prevents the imposition of.*the limi-
tation in this section 46 (47 Cal2d oS 306 P:2d_
849, ae ye ee | i
: 4 7 |
2. Does the validity” of the: ‘tatints involve the -
nsideration of the water xights of anyone and par- —
ularly of the United States? 7
>
3. Can a trust imposed on. 5 wate rights -plirsuant
the water rights. “it ‘needs to accomplish a federal :
purpose? | ee
Certain additional questions present in all the cases
except Albonico, are as follows: |
- 4." Does: federal law provide, that upon’ repayment
the districts contracting with the United States must
_ be.granted-title to, “works for the storage and distri- *.
bution of water to and by the district” (47 Cal.2d
s 647- 648, 306. P.2d: 854, AJS 63, ‘not dependent. on a .
Ra Cal. 2d 631; 306 P.2d 844, AIS 403?
“Se: Does federal law require that. the. contracts with
tN
livery works (other than local distribution systems for
the use of individual districts) to be repaid in 40 years
(47 Cal.2d 630-631, 640, 306 P.2d S44, 849-850, AIS:
CN ee :
~ 6. Does ieiihias 8 of the Reclamation Act of 1902
“States to the provisions of state law regulating public .
utilities where Congress by section 9(e) ofthe Recla-
mation Project Act of 1939 (53 Stat. 1196, 43 U.S.C.
federal projects which may’ be inconsistent with the ~
- state system (47 Cal. 2d 642 2, 306 : Pd 851, AJS
55) E pe ae
* wee
t& state law prey ent the United States from acquiring wa
“ future and necessarily. discretionary act of Congress” =
1 : “the United: States specify an obligation of the con-.
- -traeting district for construction ‘of storage and de-
(32 Stat. 390, 43 U.S.C. $4372, 383) submit the United ee
§485h (e)) has provided a system of regulation’ for ° |
ae cae al
1. ~“Beation: 9(e) of f the Reclamation, Project Act of
7 1939. (53. Stat. 1196, 43 U.S.C: Ԥ485h(e)) authorizes
the Secretary of the Interior to enter into contracts to
furnish water for irrigation purposes from federal
_ reclamation’ projects. The term of such contracts. is
not to exceed forty years. - 9 -.\\
(a) Does this. section authorize the United |
‘States’ at its diserction. to discontinue. water serv--
ice at the end of the contract term’ (47 Gal. 2d
64, 306 P2d.850, AJS 54)? a
“(b) If it: does, does it impose upon landowners ;
- a -burden““‘under which they may suffer the loss -
of water: rights atthe discretion of the United
States” so that it is ‘‘contrary to ‘well-established. :
_ constitutional’ principles and protections” (47
oad 643, 306 Pid sO, AJS 5a)?
v
~The 3 remaining questions axe present say in Santa
td
Barbara, which: alone involves eontracts for the |
delivery of water for municipal - water: supply pur- °
‘oe
poses. The questions, inferentially but not explicitly - .
raised in the opinion below (47 Cal.2d 13, 306 P.2d’
(884, AJS 221) ares as follows: ‘
“8. Does section 8 of the’ FE ET We Act of 1902"
(32 Stat. 390, 43 U.S.O, §§372, 383) submit the United -
_ States to the provisions.of state law regulating public _
utilities “here Congress by section 9 ( e) (2)..of the
_ Reclamation Project: Act of 1939 (53 Stat. 1194, 43.
U.S.C. §485h(e)) has provided a system of regula- _
tion for federal projects serving water, for municipal
_water supply purposes which may be inconsistent with
; the.state system? ae |
. e
c ?
.
AY o. y ~
9. Se ction-9( e)( 3 of the Rodainintion Project Act
‘of 1939 authorizes the Secretary of. the Interior to
“T - enter ‘into contracts to furnish water for municipal, a
water supply purposes from féderal reclamation proj-
ects. The term of of such contr act 1s not to. exce ed forty
years. ree —— 3
(a) Does this section iia the United.
States. at its discretion to discontinue water serv-°
ice at the end of the contract term?»
(b):. If it does, does it impose upon. water
users a burdert ‘under which. they may suffer .
the loss of water rights at tha discretion of the
United States’ and is therefore “contrary to
well-established eorfStitutional principles and. pro-
‘ tections”” Sat Cal. 24,643, 306 P. 2d 851, AIS 56) 2.
Bi
a
: v
g ny ~ ss ee Od
: STATEMENT OF THE CASES..
+ _THE CASES AND “THE CONTRACTS.
The Ivanhoe Irrigation District and the Santa Bar-—
bara County Water Agency were organized for the
_ purpose of obtaining water thfough the United States
_. Bureau of Reclamation, the’ one from the, Centrat
* Valley Project (Iv. Pl. Ex. J., pp. 2-3) and the other .
from the Cachuma Unit of the Santa Barbara County
_ Project (House Doe., No. 587, 80th Cong. 2d Sess.
78-79. (1948), S.B. Df. Ex. A, R. 647-648). The Ma-
- dera district was organized in*1920 as:suecessor to a
' distriet organized in 1888. Both the original and suc- °°
cessor , districts . were ——— al large landowners.
Se
- the advent of the Central Valley Project the dis-.
oy, , trict*was not able to secure ‘an adequate water supply.
(Adams, Irrigation Districts in California (State. of -
- Calif., Division of Rapinedring ete. Bull. No. 21).
199-203 (1929)). ae x , .
‘The three contracts involved in ‘the four cases may,
—“ta “present purposes, be treated as substantially
- identical. Thus ‘the California Supréme Court -de= a
cided the Madera, Albonico and Santa Barbara cases :
on. the basis of the Ivanhoe ase (47 Cal. 2d 694, 697-
698; 713, 306° P.2d.894, 896, 884, AJS 145, 183; 221). .
% Elements: -common to each | case ‘are the validity, in- .
terpretation, and interpretation as affectetl by validity _
of section 46 of the Omnibus Adjustment Act of 1926
(44 Stat. 649, 43 U.S.C, §423(e)), and ‘section 9(e) —
of thé Reclamation Project Act. of 1939 (53 Stat.
1196; 42 TT, Sg a. 4 § 495 ( fey), relating to water supplies
for irrigation. The' ‘Santa Barbara case also involves
_ ‘segtion 9(c) of the Reclamation: Project Act of 1939
(53 Stats. 1194), 43, U.S.C. §485h(c)) relating to” §
. municipal water supplies, but the other cdses do not.
Each of the contracts provides for delivery by the’ -
United States .of ‘an irrigation water supply to the —
district. for a period of forty years at spevified rates
per acre foot payable annually in advance of de-
livery (R. 17-21, 192-197, 482-486). Fiirther, the Ivan-
hoe and Madera contracts, but not the Santa Barbara
- eontract, provide for expenditure by the United States ff
of funds for construction of a system of works t& dis-
"tribute this Water Mipply to the lands within the dis- :
‘triets and for repayntent. by - the districts, in forty
po Money Fat ‘ A ms a ee
15
“equal prey installments without interest, af the
, amount spent for this purpose. tie oe aaa ce ai
| +: The so-called “acreage limitation” is in each of
thd contracts (R. 36-40, 213-216, 497-501)? Despite its
-_ : name, it is a restriction on the delivery of water, not
'_. 6n the ownership of the land.
. The districts | promise. not to furnish water or serv-
- ice-madevavailable under the contract to more than —
_ - 160 acres of irrigable land: held by any landowner in
the. district: (320 acres for a husband and wife). But
if the owner agrees to sell his ‘‘excess’? land witain —
10 years at.an appraised price which does, not include |
any enhancement jn value ‘resulting from the exist-
ing or prospective - possibility. of seeuring project
water or service (R. 36, 213, 497-498), he may receive
water delivered — the contract for all his land CR.
39, 215-216, 500). If he does not desire to scll his cx-
cess land he sivewolien may designate his non-excess _
land and be ¢ligible for project water delivery to 160
or 320 acres, as the case: may be (R. 39-40, 216, 500-
2The Sadi Barbara Couns Water ‘Agency has entered -into
contracts with its member. units; the City of Santa Barbara and
the Carpinteria, Goleta, Montecitt and Summetland-Courity water
districts! Each of these also contains the acreage limitation and -
. the validity of these contracts is also an issue in this proceeding
. . (R.,e.g. 528-532, 560-564). Only the sity of Santa Barbara and
the Montecito contracts are included in the printed record {R.
7505, 537) as, with the exception of the district names, the provisions
of the Montecito;- Carpinteria, Goleta and Summerland contracts
are identical, These six contracts were validated by the trial court
in the instant proceeding (R. 623-626). Three other contracts con-
- taining the limitation have been validated by final and unappealed
decrees., These are between the United States and the Carpinteria,
‘Goleta and Summerland districts for distribution systems under
§ 9(d). (Calif. Districts Securities Comm. mae: 1954-55, 31 °
(1996) ). ;
ad
ad aa :
: Pees se ,
: 501y. "These provisions were included because of the
requirements of. federal law. (Omnibus. Adjustment
Act pf 1926,-§46, 44'Stat. 649, 43 U S.C. §423(e)).”
If the. federal law is valid, they are authorized by -
state law (Calif. Water -Code’ §§23195, 23197, 23200;
Santa Barbara County Water Agency Act, $$6, 6.3;
Calif. StatsB1945, ¢. 150, pp. 2787, 2788). ‘There ‘is J
a riothing, in_the-eontracts- prohibiting the-owner fro1 m- |
keeping. his excess land and: irrigating it with water, — |
pumped from. underground or et from any non-
Project surface supply.
. The Ivanhoe and Madera contracts seer that. title |
to all -the project works,’ including. the distribution =
‘systems being built with federal funds, shall remain
_ in the United States until otherwise provided by-Con-. .
gress (R. 36, 212). The.sprovision is a restatement of
federal law ( Reclamation Act of 1902, ‘$6, 32 Stat.
389, 43 U.S.C. §498)..
Phe Ivanhoe, Madera and Santa Barbara cases
arose when the districts brought the confirmation pro-
eeedings required by .aw’ (pp. 5-6 herein}. The Al- ff
- benico case resulted from the effort of the Albonicos#
husband. and wife, to- have their land in ‘excess of
_ 320 acres excluded from the Madera district. “As de- |
cided: by the ‘California Sapreme Court the Albonico
case involves only” the validity of the water deliyery
restriction in the Madera’ contract (47 Cal.2d 697- 698,
306 P.2d 996, AIS 183). ;
17 e
TL», THE REASONING OF THE CALIFORNIA COURT.
‘The California Supreme Court ‘either rejected or
| found it unnecessary ‘to’ pass “upon the miscellaneous
attacks madé-on the contracts under state law (47 Cal.
2d 646-6 7, 693-694, 713-714, 306 P.2d. 854, 893-894, .
:2 884, AJ S 62 153-54, 222). The grounds of invalidity |
“fof the ccniraete are all federal.As- the court said ”
in Santa’ Barbara in meee 5 its, 2 opinions: in |
Ivanhoe and Madera: ae
“In their fifth: affirmative défense the adtend:
ants raise issues which have been discussed and °
disposed. of in Ivanhoe Irr. Dist. v. All Parties, :
ante, p. 597 [306 P. "20 804), and in Madera Irr..
---Pist> v. All Persons, ante, p: 681 {306 P.2d 886].
_In accordance therewith it is corfeluded that the
“excess land provisions.ef the contracts involved
. here, which are’ substantially the same as. those
‘ in the Ivanhoe and Madera contracts, are inap-
plicable and if not declared to be so would deprive
the landowners of the member units of their -
property rights without due process of: law and °
‘ constitute a denial of the equal protection of the
laws; that the United States is acting in its pro- -
prietary capacity as.a purveyor: of the domestic
waters of the state to the agency and ‘its mem-
_ ber units; that it is bound to observe and ‘comply
with the: laws of the state with reference ‘to the '
rights of the water. users being served, and that
the contract is invalid insofar as it, by implica-
tion or otherwise, provides that the United States.
_ean.arbitrarily cause to be discontinued the dis-
tribution of water to those for whose benefit the
right to the water was acquired in the first in-
te (47 Cal.2d 713, 306° — 884, AJS 221).
18 :
R &
More specifically, the various. bases of. invalidity
are? ; ie ate ws
1. The 160-acre water limitation provisions of the-
contracts (R.' 36-40, 213-216, 497-501) are invalid be-
cause (a) the stafitte on which they are based, ‘section ;
= 46 of. the Omnibus Adjustment Act of 1926 €4 4 Stat.
| 649, 43 U.S.C. §423e), does not apply as a ni tter of.
federal law to the delivery of water to priv ately owned
land, (47 Cal.2d_ 638-639, 306 P.2d 849, AJS 50), and
(b) if it did, the statute would be unconstitutional as
a deprivation of property without due process and.a
dehial of equal protection of the laws (47 Cal.2d 636-
639, 645,’ 306 P.2d 847- 849, 853, AJS 46-49, 59).
.2. The provisions of the contracts relating to de-
livery of and paythent for a water supply (R.- 17-21, —
192-197, 482-486) are invalid because, contrary to.fed- |
eral law, -(a) they do not provide for district repay- -
ment of a specific sum as the district’s share of the _
construction cost of the main. project storage and’de- -
livery works serving the districts (47 Cal.2d. 630-631,
640,\ 306 P.2d 844, 849, AJS 38-39, 52), and (b) they.
_ auth rizethe United States to act asa public utility -
without complying with state public utility regulation
(47 Cal. 2d 642, 306 P. 2d 851, AJS 55-56), and also be-
cause (c) they are unconstitutional to the: extent that '
they reserve to the United States the right to discon-
tinue water delivery at the” end. of the contract texm .
(AT Cal.2d 642-643, 306 P.2d 851, AJS 56).
3° The conti-aet provisions. reserving title to. all
project facilities in the United States until otherwise
provided by Congress (R. 36, 212 as Cpe Act |
«-
LT
‘ek: 1902, §6, 39 Stat. 389, 43-ES.C. =$498), is -con- ~~
trary to the debtor-creditor relationship between the: —
_ district and the United States derived, from- federal
_. law (47 Cal.2d 631, 640, 648, 302 P.2d 844, 849,-854, -
f -AdS 38- 40,52, 63-64). : ;
. The holdings of uncohnstitutionality are predicated
® on the theory that the United States-is under a duty
to deliver water 1 in perpetuity and without regard ae
the federal statutory regtrictions. This duty grows
the title to all water rights of the United States held
2 for project purposes no matter how or from whom.
they ‘were acquired (47 Cal.2d_ 628, 306 P.2d. 843,
no matter into whase hands the title thereto passes -
(47 Cal.Sd 625, 626, 306 P.2d 841, 842, AJS 30, 31-32).
‘The trist is for ‘‘all of the people’? who are in a’
- “position to demand: benefits without discrimination” .
» (47 Cal.2d 627, 306 P.2d 841, AJS 33), and’ “who may |
+ become entitled. thereto”’ - (47 Cal. 2d 628, 306 P.2d°
| . 842, AJS 35). Section, & ot ‘tlie Reclamationi-Act of .
+ -~1902 requires that this; trust right be specifically
' recognized: (47 Cal.2d 627-628, 306 P.2d 841-842, AJS
. 33-35). Thus- when the eontract requires t , limita:
tion to -be enforeed it deprives the landowner of his.
zg property, “the use of water to which [he] is entitled” »
Pin Gal. 2d 636, 306 P.2d 847, AJS 46), and is invalid. :
‘because “the right of an owner of real property to:
use... his property cannot be constitutionally limited ..
on the basis of the-amount of property he owns’ (47
SS eee
out of the trust which the court has found encumbers
'.AJS 35): The trust adheres to the water perpetually orl
Cal. 2d oot; 306° Pad 848, AJS 48). Similarity both. : a
arn :
‘e section 8 wai the trast rights prevent validation of :
the contract because it-is subject to an inference that ~
the landowners ‘‘are not.entitled té water-rights’which
continue’ beyond the 40-year term of. the contract”’
, ar Cal.2d -641-643, 306 P.2d 850-851, AIS mati).
p A - Ss i | ¥
| SUMMARY OF THE | ARGUMENT.
Sharply pirat from. the cases at hand. ‘are
those heretofore decided by this court- involving con: 'E
flicts between the states and'the United States. For ff
example, there ig no eénflict here as to regulatory. :
- jurisdiction (ef. US. v. Appalachian’ ‘Power Co., Sh. ° 4 :
‘U.S. 377 (1940)), or as to conflicting, regulations (ef. ec
-. Federal Power Symemnanigys * v. Oregan, 349 Ms S. 435 of
- (1955)). a ) | s
: What is involved is the. authority : of the United
| Stateseand various state agencies. to cooperate in the
- conduet of the Central Valley and Cachuma reclama-
' tion projects. The authority for. and mode of. such oi 7
cooperation is specifically provided in both state and _
- federal law. Since the cases arise as a result of. a
cooperative effort, any references, to actual: or pur-
ported controversies over the relative rolés of: the |
_~ state and the United States would be oblique and mis-~
« leading. The compatability. of these roles ‘is. here
insured: by statutes obviously drafted for that purpose.
"The: Ualifornia court has, however, not considered © |
the case in terms of ‘authority, and has instead coy £
sidered it in terms of: title. Ht has endowed property, | :
u
. rad
? .
2:
in W ater w vith attributes and’ limitations, such that :
the ‘United. States cafinot, in its view, acquire the
rights needed -to perform these contfacts. It seems
to reason that since the water rights needed to per-
form. the contracts cannot be acquired, the contracts: ©
must be invalid. - This fis an essential, but not the
% only, fallacy of the opinion below. |
rs ' Adherence to this fallacy is made. bewildering by
- the faet that the California court recognizes that none:
of the forms of private rights heretofore known under
the law, 6f California have been impaired, /and that’ -
5 the United States is proceeding to acquire rights ini
g accordance | with state law (47 Cal.2d 618-619, 623, .
_ 3806 P.2d 836, 839, AJ S 19-21, 27). ‘Perhaps this is |
the reason that the instant cases are cases of first ~
‘impression: The California court states it can find.
no authority for applying the limitation ‘where the
federal government had-. . only a trustee’s interest
_ in the water to be applied’ (47. Cal.2d. 637, 306 P.2d
7 { 848, AJS 47) (But ef. Jurisdictional Statement. pp.
| 26-27). The quoted words demonstrate the complete _
circularity of the reasoning. Of course, no such
case could be found because none exists. And none >
exists because never befpre has . it been held that
property rights in a state’ could bé. endowed - with
ze attzibutes which. would prev ent the United States
frem acquiring the rights _ it. needs to accomplish -
| federal purpose. s
] The’ Central Valley Project was specifically author-.
ized by Congress (50 Stat. 850). The Cachuma Proj-
ect was authorized under section 9(a). of the Reelama- |
a
22.
tion Project“Act of 1939 (53 Stat. 1193, 43 U.S.C.
* §485h (a) ). Congress’ constitutional power to under- --
take these “hig bundles of big projects’’ is {‘elear and
ample’ (United States py. Gerlach Live Sock. Co.,
339 US.. 725, 738 (1950) ). : : 3
. The power to undertake the projects has been ims»:
' plemented by the’ grant of broad authority to acquire _
property for project purposes. The Central Valley . -
authorization penvides: “«.'., the Seeretary of the F
“Interior may... acquire. iy fiepeidttees in eminent’. §
: _ domain, or viheewiog, all hands,. sTights-of-way; water
-- rights, and other. property necessary for said [proj-
ect] purposes.’? And reclamation /law generally gives -
» » the secretary authority, which’ ‘“‘could hardly have
been conferred in more comprehensiye terms,” to §—
acquire. property for reclamation purposes’ by con- §
| deranation, purchase or appropriation. iriformally 3
_ (Reclamation: Act of 1902, §§7, 10, 32 Stat. 389, 390,
- 43 U.S.C. §§373, 421; Henkel v. United States, 237- &F
US. 43, 50 ( (1915) ; United States v, Buffalo Pitts: .
C0.,; 234° US. 228, 233 - “(1914)). ‘The fact that the
“Vendor or condemnee may lack power to convey does °§
not result ina corresponding incapacity of the United
States to acquire (United States v. ‘Carmack, 399
* US. 230,° 239 (1946) ; Henkel v. United States; 237
‘US. 43, 51 (1915)). -
‘Since the United Stated ean acquire whatev er righita
it needs, ‘and since the: acquisition is’ not. contingent
on payment in advance (Hurley v. Kineaid, 285 U.S.
° 965, 104 (1932)), it follows that the United States’
watér rights are irrelevant in these proceedings. The
only questions here are whether the contracts accord
with ‘the requisite state and federal grants ofau-.
thority, because if they do, the United States has the
} means to acquire the- rights | neeessary to perform a
| > the contraéts. | : |
But the ‘assumption that, the. Cesota” landowners
have rights which the. United. States must: respect 2
SR specifically because it lacks the power to acquire them,,
-f is. not enough: to lead to the. result of invalidity of 3.
+ the contracts. Even:if such rights existed. the con-'
| tracts would be justified onthe theory that the United -
7 " States. has the power to. condition ' and contrdl. the ©
use of the storage’, and distribution ‘works which it
“has built and: owns. If’ the “excess” ownérs_have
rights in undeveloped water, there is nothing j in these.
_. ‘eontracts which would. prevent them from exercising’
their rights by building their own project. ,
7 Obviously, if the contracts are to be invalidated —
. .because they do not, encompass an affirmative duty :
oof the United States to deliver water to the “excess” e
2. owners in ‘violation of federal law, an additional
| fie by i imposing 0 on n the U nited States the. obligations
of a- public utility; ‘This it does despite the restrico
tions in the- federal statutes which, if: the utility .
analogy has any meaning, would be restrictions on
. the scope. of the: United States’. “dedication of ™
-property to a public use. .
In this respect the United ‘Stateet is Sopastatly hii
| advantageously situated thani’a private distributor -
> -of water. A- private distributor can: 80 control his
conduct as {6 avoid the obligations of a public utility -
oa his‘dedication (ef. Hollywood C. of C. v. Railroad
» 26
; Fallen v, Bhardaa ¢ Commission, 179, Cal. 68, 81-85,
ae yi) Pac. 466, 487 1- 473 (1918).), or, if he assumes them, .
‘not be. compelled to render :service beyond the scope
Com.; 192, Cal. 307, 310. B11, 219 Pac. 983, 984985"
(1923)).0
' ‘Inconsistent, w ith the “utility obligation, “hate con-
sisterit.with the holdirig thatthe United States has.
lost control over its property, is the California court’s:
injection of the issue of title. to works. Paradoxi-
cally that court. ‘fitids 3 in federal Jaw a “dghtor-credi- )
tor’’ ‘relationship: which will require the United States:
to transfer title to its. works despite specific federal
legislation to the contrary. In other wards the utility’ Ss
customers will, eventually become its owners. Why
\ this” “happy anqmaly results only when the United:
States is the utility is left. unexplained.”
The ‘conclusions that the” ‘United ‘States - eucntied
acquire what it needs for a.federal. purpose, and that
it must. assume duties inconsistent with federdl law;
| depehid on ‘the Calffgrnia court’s tortured jnterpre-
. tation of section 8 of \the Reclamation Act of 1902.
| That. section is construed te give the state. that veto |
power over the specific operation of federal projects
.’ which this court has. heretafore denied (Nebraska v.
Wyoming, 3%@,U.S. 589, 615 (1996); F.P-C. ix: Oregon, 4
349 U.S, 435,¥45-446 (1955)). Ignored is the actual -
| operation . of section 8, which is that those who have —
valid propertip rights vest ted under State law are |
entitled to compensation. if those rights are taken for
e reclamation purposes (United States , Gerlach Live:
:
pan: a we e~ -- wae ’
“25°
: Stock. Co., 339 US 125, 734-739 (19505 ); ef. PPC. -
v. Niagara’ Mohatok Power Corp., 347 t. S.. 239, 250. -
.- 251- (1954)).. Of course, we do not concede that in
this, ‘instance rights have been “taken” op that the
. “rights’’ “involved ‘are not of such an, evanescent,
nature as not. to be “property” in ay meaningful
sense.
We start, iueretone with ‘these’ assiimptions (1)
no rights. are involved ; (2) if there are rights they an
have not been taken; and (3) if there are rights ;
which must be taken, the author ity to take and pay
for them exists. “The” question. then becomes one of
a inspection’ of ‘the contracts to ascertain their con-
formity to state and federal laws.. Conformity to
state law has been settled by the. decisions. below. In
this brief .we wattempt to show aso acs de the: coll-
formity to. federal law.
‘Federal, law plainly requires that.delivery of water. ,
from the reclamation projects’ involved in these cases’
. be Subject to the 160-acre water dimitation, and that | i
thé contracts .so state: (Omnibus Adjustment Act of
1926, $46, 44 Stat. 649, 43 U.S.C. §423(¢)) 0
In providing for delivery of water for a: forty-
_ year term at.a charge per acre foot, without requiring
-repaynient ‘in forty years. of a specific sum of money
representing a-shate ‘of the construction cost of the
_. project danis’and rhain. canals, the contracts are fully
4- consistent: with. federal law (Reclamation, Project —
~ Act of 1939, §§9(¢), (e), 53 Stat. 1194, 1196,/43 U.S.C.
§§485h (©), Kony baeaced they do: not set forth ‘with
o e ij m aw. e
i ° :
particularity ‘under what terms and conditions ‘water
delivery may be continued after. the forty-year term
of their water delivery. provisions expire, neither vio- _
lates federal law nor creates an implication that when
these contr acts terminate water delivery mag be arbi-
trarily discoftinued. Indeed, the opportunity to con,
tract: for contigued water de livery is expressly guar-"
anteed by federal legislation enac ted since these con-
tracts were ‘negotiated. Uh ee er, eee |
‘Finally, the provisions in: the Ivanhoe and Madera
‘contracts. reserving to the United Statés the title to
all. project. property are not in conflict. with federal
daw; they gerely, restate what federal law requires
in any ‘event (Reclamation: Act of 19p2 §6, 32 Stat,
389, 43 U.S.C. §498)8 F
Our position is based ‘pot only -on the: foregoing
legal grounds but, also. on practical, ane even moral
grounds.
The’ “practical reasons can be illustrated by ex-
‘amples. ‘The Goleta‘ County Water District in. the”
‘Santa Barbara County. Water Agency has a validated ©
contract with the United States for construction of
a distribution system. ‘Under this it is obligated to *
pay the Uniféd States some. $3,600,000. The. funds °
for payment. are intended to be derived from. the de>
livery. of water. _ Therefore, if the Santa. Barbara
| contracts are invalidated the district will either have
no means of meeting: its obligations, or will have to.
aSSess its landowners for the tseless” system. The
Carpenteria and Summerland districts are, obligated
‘under similar validated contracts. Further, th¥ough-
out the Central Valley. Project there are at least
sixteen “unappealed an final jalan eo :
o
=~ : o + ‘>
similar contracts (Calif. Districts Securities Comm.
’ Report 19. 54-55, pp. 30-3i- (1956)). It is only pos-
esible to - _speculate on the financial hardships: which
would be worked on these districts through retroactive
denial of their. arrangements, or alternatively, the
"some of these contracts ‘valid: and the remainder
Ss
| inv ralid. , >
_ This. eds to the moral oniuan: ry our position,
Not only do we feel responsjble for attempting to
| vindicate . the contracts already validated, but also
| we feel responsible fo? preserving. thg, state’s ability
to cooperate with the United States. The state has —
“ter. years actively’ sought federal expendittires for:
. reclamation (HH. R. “Report, Special Subcommittee on
~ Irrigation and Reclamation 111-112 (1952); Iv, Ex.
N). The position: we take avoids the embarrassment ,
- which Would-be raised by soliciting federal aid on—
the one, thand and thereafter denying capacity to im-
“ \ginia v, Sims, R41 U.S. 22 (1951)). To paraphrase |
- the language of} this court, whatever logie could be |
*summoned to support a contrary view would hat
some vice, at least the: vice of injustice (Monongahela
harsh Co. v. U nited — 148 U. 5. 312,- 338 —
& (1893))..- SS : fees
7 San the cases were decided on the basis of Tvanhoe.
This i is consistent only with exciusive reiiance on fed-—
eral grounds, for there is no state ground’ common to
° the Iv anhge, Madera and Alboyico cases on. the - One
- hand, and the Santa Barbara case on the 6ther. Each
- point wick might, in isolation, be considered ancinter-
' pretation of state law is, in fact, contingent upon .the
_ administrative complexities resulting. from haying =
pose federal conditions on the other (ef. West Vir- ~
court’s déision. of interwoven federal questions af-
fecting the capacity of the United States to enter into
and implement the contracts. The various basés of
invalidity are specific lly set Sut under the Statement
of the Case (pp. ‘18-19 herein). ‘These grounds of.
: invalidity are all federg and, are predicated on the
theory. that the Unite States’ is under: a dutyeto
deliver water in perpetuity’ and without regard” to
~ federal iensa ened restrictions. : e
st , ARGUMENT.
L THE DECISIONS REST SOLELY ON FEDERAL GROUNDS.
In their motion to dismiss, the appellees argue that
the cases depend ‘solely on state law, 1.¢., whether | the
districts have authority to enter into the contracts is
a. matter of state law (Mo. Dis. 16), and. that even _
_if the United States were ‘‘the absolute owner in fee
of the waters within the Central Valley Project and
ean ‘condition or limit their use ds‘it sees fit, still the a
judgments of the court below would stand. and’ the
contracts would of necessity “be declared. invalid (Mo.
. Dis. 22).’’-
"These contentions are in’ error.: Possible ‘state
grounds of decision. were definitely excluded. Ail the
‘eases were decided on the basis of Tv anhoe, a technique
» consistent. only with. exclusive ‘reliance on federal.
= grounds since there is no state ground common to the .
: *
Ty anhoe, Madera and Albonico eases on the one hand,
‘and ‘tha Santa Barbara ease on the other. Finally, | ;
each: point which might, in’ isoliition, be considered
an interpretation of state law is, in. fact, contingent
_ upon the court’s Wecision of interwov én federal ques-
tions affecting the capacity of the United States to.
enter into and implement: the contracts. ‘There «is -
é
vie —
. nothing in California Aw prohibiting contracts with »
the Unitéd States: for reclamation pus‘poses, and the
California court so’ states (47 Cal.2d 630, 306 P.2d
(843, Ak S 37- 38). 7
A.* The Possible State Grounds of Invalidity Were Rejected by .
the California Court.
_ Whe contracts and the state. laws authorizing them —
were attacked’ on a variety of ‘state grounds, e.g., that —
they constituted an improper~abandonment or dele-
- gation ,of state powers to the, United States. These
“were rejected by the court (47 Cal.2d 630, 646-647,
693-694, 713-714, 206 P.2d 843-844, 854, 893-894, 884,
AJS 38, 62, 153-154, 222), Indeed, the greater por-
tion of the ‘Santa Barbara,opinion consists of a dis-
cussion and rejection of various attacks under state
law on the existence of the agency and its relation —
with its member. units (47 Cai. 2a 707-713, 306 “P.2d .
~ 880-884, .AJS 211-221). ‘Contipry. ‘rulings on these
points might have constituted adequate state grounds |
preventing review here. But @e actual rulings are
favorable -te the contracts, and thus show-that the.
. grounds of invalidity are federal and only. federal. |
B. Only Federal Grounds Are Common to Smee Ivanhoe and ve
‘ Santa. Barbara, Cases.
_ *The, California Supreme Court decided the Madera,
ie Albonico and Santa Barbara cases on the hkasis of the
— Ivanhoe ease (47 Cal. 2d 687, 694, 697-698, 713, 306
P.2d 890, 894, 896, 884, AJS 145, 154, 183, 221). These
cases do not involve a.common state bom ‘Tn
Ivanhoe the court said: 57
“The duty: of both of the scthnitities cities
in the performance of their ‘obligations to thé
. landowners in the district is set forth in section —
°
=
22250 of the Water, Code. It is there provided
that water distributed by districts. shall be ‘appor- -
tioned ratably to each landowner upon the basis
of the ratio which the last assessment ag: ainst his—
land .for district purposes bears to the whole ;
sum assessed in the district’ except as Srov ided
otherwise in the code. No pertinent. exceptions
appear’? (47 Cal.2d Gr6, 306 P.2d ager AJS
46-47).° |
a. ——————
The- appellées, relying’ 0 on -the abov e, ut ge that the .
decisions thus depend or. California Water Code sec-
“tion 22250. . Nevertheless, they describe: the section
| correctly as a rule relating only to irrigation districts
(Mo. Dis. 12 , 18). ‘Section 22250 does not apply to .,.
the Santa ecliaes County Water Agency, whieh is
‘not an irrigation district, er to its member units
which are county water districts organized under the
County Water District, Law: (Calif. Water Code
§§30000 et .seq.), or to its member unit, the City’ of
Santa Barbara, which is a chartered city under Cali-
fornia Constitution, Article 43 section 8, As a char-
tered city, Santa Barbara has a large degree of control
over its water supply as a *‘municipal affair’’ not
subject to the general laws of the state (Calif. Const.
Art. XI, §8, par, 12; Wehrle vw. W. & P. Commis.,
211 Cal. 70,.73; 293 Pae. 67, 68 (1930)). Wo entirely
. different meeioa of. raising money—aii ad valorem
tax for. district purposes and metered rates for itl
' delivered to users—applies to the Santa Barbara
County Water Agency and its member units (Calif.
ne Water Code, §§:1023, 31025, 31701; Santa’ Barbara é
‘
3This coneinaion on the. saintieattens of Calif. Water Code
§ 22250 raises federal questions not only beeause it relates to the *
duty of the. United States but also because it is based on the -
assumption ‘that .delivery restrictions of the limitation are not
a eiataatan See pp. 63-65 herein.
County Water: Agency Act, §§10, 10.1, Calif. Stats.
1945, e. 1501, pp. 2792- 3798, Calif. Stats 1949, ce. 12,
- pp: 25-26).
If the: California: court had been saliaa? on the
interpretation of state law, each of the state. laws
relevant to each of the special situations would neces-
sarily have been considered. Instead, these laws are
_not mentioned: and-the Santa Barbara’ contracts, both
master and. member unit, are invalidated on the au- -
thority-of the irrigation district cases (47 Cal.2d 713,
306. P.2d 884, AJS 221). This is a compelling indica-
tion that only federal grounds were relied_on, ie., the
inability. of the United ‘States to acquire the rights
~ needed to fulfill its contracts, for only this. ground is
common to the Santa Barbara ease and the irrigation
district eases. .
re eed
C. The Grounds of Invalidity Are All Federal.
- There is nothing in California law that prohibits
irrigation districts from contracting with the United
- States. ° Quite to the contrary, such contracts are |
specifically authorized by the Irrigation District Fed-
eral Cooperation . Law (Calif. Water Code, §§23195 co
et net: This is pointed out in the 7 vanhoe opinion: —
. As stated it is certainly true that it was
~. within the power of the district under the laws -
of this state to do in the first instance all that the
United States -is obligating itself. to.do' under the
contract. with reference to. the construction of a -
distributing system. The district was authorized |
. to obtain funds’ for that purpose by borrowing. .
from the United States with or witkout the is-
suance: of ic canes district bonds (Wat. Code,
~ aS
. ia
'- $§23280-23289) and it could contract for the pay-
- ment for water distributed to it by or through an ’
outside souree at a fixed point of delivery upori ie
- the payment of the charges. agreed upen from |
. funds of its own; if available (Wat. Code §22228).
in _essence,- ‘therefore, ¥ we have here one party
-agreeing to provide the funds for construction
‘ work and undertaking to furnish water ata defi-.
- nite delivery point, and the othemparty agreeing
_ to accept the water at that point with payment
therefor at a fixed rate and repayment ‘of -the
construction charges -in installments within . 40
years, coupled with what appears to be all stffi- °
cient assurances of security in the event ‘of non- .
y payment. . Within © the sompass of those pro-_
. visions there ean be no. doubt of the right and
power of the parties’ to lawfully contract’? (47
Cal. 2d 630, 306 Fae 843, ‘AJS 37-38). ;
ee * Invalidity of Federal Laws.
What then in the present contracts. did the Cali-
ei fornia court -find invalid? The’ answer is ,that ‘the -
water deliv ery restrictions (acreage limitation) im-
- pesed by section 46 of the Omnibus Adjustment Act
of 1926 are asserted to be invalid on the two grounds _
of denial of due process and equal protection. . Also .
assertedly invalid’ on the one gronnd of denial of
due process. are the provisions of the contracts predir ©
cated on section 9(e) of the Reciamation Project Act .
of 1939, i.e. the provisions relating to: phil of
and payment for a water r supply.*
4The provision in the Madera and Iv snkos contracts resenving
title to all project facilities in the United States until otherwise
* provided by Congtess. were invalidated on the ground that they
_
' These results are predicated on the theory that the
“United States is: under’a ( uty to deliver water in.
_ perpetuity and without regard to the federal statutory °
restrictions. 'Thése duties are - ‘said to grow. out of ©
the trust which the court says will encumber the title
. to all water rights of the United States held for proj-
tect purposes, and which will disable the United States
| from oni federal law (PP: D4-57 eco
2. tt ‘the Federal Laws Were Valid the Contracts Would Be Valid.
That. the judgments would be differerit if the Cali-,
—ornia tourt’s view of the rightd of thé United States” .
were different j \s plain from the sanguage of the Ivan-
hoe optnion, The court says: :
. the féderal law ‘could be applicable pal}
on the theory that the United States is the owner |
absolute of the domestic waters of.the state with.
the right to the use thereof free from any trust
relationship on behalf of the real owners thereof,
- namely, the water users in the district” (47 Cal..
2d 639, 306 P.2d 849, AJS 52). at:
“Tf the United States, or the State of Cali-.
' fornia or any of its agencies, should be de-.
_clared to be the owner of the title to the water
without restriction it would: necessarily follow
that it would have complete dominion and con- -
trol over such property for the purposes of dis-
tribution: or for any other incident of ownership —
and use, in such case the principles of law ap
conflict. ‘with the ° ‘debtor creditor relationship existing between
the United States and. the district/s]” which the court derived
from ‘‘applieable federal law’’ (47 Cal.2d 631, 640, 306 P.2d 844,
- 849, AJS 39-40, 52)" This holding is one of interpretation rather -
; than of validity of federal law, salad
a
34 :
ee
| See ieee |
. plying to unrestricted ownership would control”’ —
(47 Cal. 2d 620, meh pace 837, ATS 2 ~—<
That the jndcommda ana be different if the rights A
of the United’ States had been held to be different —
is not only evident from what the California court
said, but also from what it did not say, Nowhere
- would be inhibited in their eontracts with the United
States if the United States were ‘able 65 secure com:
Yo a
plete title. The closest approach is tle. statement.
that “No pertinent exceptions appear’’ to California
Water Code ‘section 22250 (47 Cal.2d 636, 306 Pid 4
- 847,.AJS 47). - Nevertheless, the ‘court.did say:
** Atfention has been called to section 23200 of
the: Water, Code providing that under. contracts
%
“does ‘the opinion intimate that: the state agencies
such as ‘the one in question water ‘shall be dis- |
tributed and apportioned by the district in ae-
eordance with the applicable’ acts of Congress,
the rules and regulations of the Secretary of the . |
Interior thereunder, and the provisions of the —
contract””’ (47 Cal.2d 639, 306 P.2d_,849, AJS 5). |
But section 46 of the Ornnibus Adjustment. Act of
1926 was: held not to-be an “applicable det of Con- |
‘gress’” within the: meaning of this section and, there-
- fore; not a ‘‘nertinent exception’ to. California Water
Code section 22250, because section 46 is unconsti-
| tutional.
This interaction of state and federal i raises’ a
327 U.S. 474, 486, (1986)
_ federal question. .As was said in Wilson v. Cook,
eae cae
“The meaning: of both stakites. [state and fed-
eral] as applied ‘in this case, is a federal question,
_ since upon . their éonstruction . depend rights,
. powers and | duties of the United States. ,
» Yk ee et
3. Invalidity of the Gontracte Under Federal Lawes | 3
In reaching its, conclusion : that the: contract was a
invalid because it violated the “debtor-ereditor’’ re- *
- lationship (pp. 86-88 herein) the cour, again relied |
- exclusively on. federal - law.. This is. plain, from what
it said about the relationship: gee : eee
“*We have heretof¢re declared the: débtor-cred-
itor nature. of the contract in question.’ In arriv; -
ing at that conclusion it was considered that __
4. applicable federal. law requires that the contract ’.
specify a specific amount of money to be repaid
by. the distrfctby installments, within 40 years ;
that this is an obligation for repayment. of the
_ cost of construction of . storage, and delivery
works, and that ‘the payment, by. the - district be |
_eredited against. this obligation’? (47 Cal.2d 640,
306 P.2d- 849-850, AJS 52, emphasis added).
Nowhere: in its opinions did ,tpe California Supreme —
Court cite or refer in any way to state law as pro: :
“viding the incidents’ of the “‘debtor-creditor’’ rélation-
ship upon which that court predicated its ‘conclusions
‘-on the validity of these aspects of the contracts. This
omission was not inadver tents there 1 is. no staté law on |
the subject. —
_ Again. federal law was:the basis of the eonélusion
of invalidity reached by the California court when.
it viewed t¥é contracts’ water delivery provisions as
placing: the’ United. States in fhe positicn. of a water
purveyor furnishing. water at a price. The Cali- —
fornia court quoted the. language of seetion 8 of the
Reclamation Aet of.1902 which states that’ the Secre-
tary of the Interior shall proceed in eonformity with
state law relating to. the control, ‘appropriation, use .
3 ‘or, distribution of water used in irrigation (47 Cal.
i BE 642, 306 P.2d 851, AJS-55), and then: said:
“Tt may fairly be said that the foregoing fed-
eral sfatutory provision. remaing in full force;
‘that it controls the operations of the Department
‘of the Interior so far as federal law is‘con- -.
eerned,-and that under the eontrofling state law,’
* the furnishing of water to consumers’ by a utility
must be subject'to‘and be in conformity. with cer-
tain rules and regulations established by: or under.”
the authority: of the Constitution and the stat- of
utes of the state”’ ici Cal.2d: 642, 306 P,2d 861,
\ AIS 55-56). eae
From this excerpt, it is ‘clear that the California -
court depended , on federal law, section 8 of the Recla- °
mation Act of 11902, as authority for the conclusion
that the contract had to conform to state public utility
law in order.to be valid. There is no. intimation in’
any of the epinions ‘In thése cases that state law, of —
itself, makes exdeution of such a contract beyond the —
powers of the districts. Of course there could not.
be, since state law\expressly authorizes districts to
contract with the U nited States for a water, supply
__ as well as for other specified purposes (Calif. Wat.
: " Code §23196(b) ; ; Santa Barbara County Water
Agency Act §6, Calif. Stats. 1945, c. 1501, p. 2787).
od
4. Invalidity of the Contracts Because of Possible Interpretations.
‘Federal, not state, grounds are the predicates of
> the final question relative. to the water delivery pro- _
'. visions: of the contracts. The court stated: . ~.
“Tf this contract tere: construed as imposing
upon the district -and thé landowners therein a
burden under which they may suffer a loss.of '
water rights at the discretion of the United
States, such a construction would be contrary to
. well- established constittitional principles and pro-._
tections”’ (47 Cal.2d 643, 648, 688, 713, 306 P.2d
851, 854-895, 890, 884, AJ S 56, 64, 145, anh).
o-
: Two questions are raised by: this jimsladen: Pint;
do the water. delivery’ provisions of the contracts au- -
thori# cessation of water delivery at the end-of the
. contract ‘term ?. Second, assuming that, federal law
and the contracts do @uthorize cessation of .delivery,
is this “contrary to well-established . constitutional
principles-and protections?’ (47 Cal.2d 643, 306 P.2d
851, AJS 56)? Neither question can bé or was decided
by reference to state law. Federal questions, i.e., the |
interpretation and constitutionality of federal stat-
utes ‘and contracts: are exclusively involved (S.R.A.
_ Ine. v. Minnesota, 327 U.S. 558, 564 (1946)).
It. thus appears that éach: point. which might, in.
r, isolation, be. considered an interpretation. of state ©
jaw, is in fact: contingent upon the court’s decision |
of interwoven fedéral questions affecting the » capacity
I. of the United States. Under these cireuméstances it
2 is submitted that the interpretation of the state stat-
| * utes is, in. itself, .a federal question (Wilson v. Cook,
327 U.S. 474, 486 (4986). ” ae a
38 5.
| D. Inter-action of State and Federal Laws Raises i aac Ques-'
tions.
A further aid for eonsidering the. interpreta- sy
tion of state law to be a federal question is fhat Cali-.
‘fornia Water Code section. 23200 and its’ companion
scations "23195 and 23197 are instances of state laws
_'ceterring to federal laws. That the interpretation of
ach state laws involves federal. questions is defnon-
strated in Smith v. Kansas City Title & Trust Co., 255
US. 180, 201-202 (1921), Standard Oil of. California’
UW. _ Johnson, 316 ‘U.S. 481 (1942) and F lourwey v..°
Wiener, 321 U. S. 253 (1944).
These state statutes do not -merely- adank a federal
inate in an area where the ° fey: ‘eral .rule would. not.
otherwise be operative. ‘They are the means wliereby
the state is enabling itself to take advantage of the
substantial federal benefits available under the United
States reclamation program by conforming with the
federal. conditians. It is-a, meaningless’ verbalism to
say that all the state court did was to: interpret the
o
; state law to see which federal laws applied and there-_
fore raised only a state question (Mo. Dis., p. 14 n.).
The reasons why the federal Jaw is held inapplicable.
or not a ‘* pertinent exception” are the, detergiinant
f actors in ascertaining reviewAbility. of this state law:
as one blended with federal Jaw. This. ‘uniformity can .
_ be achieved -only if there is one final arbiter to agcer-
tain the. validity of the cooperative effort (Note, Su-
preme Count Review of Stat&I nterpretations of Fed-
_ eral Law I neor porated b y ire 66 Hate. L. Rev.
1498, 1502 (1953). .
A rf - $2
a
' State and federal cooperation depends, of course, on
“both state. and federal law. If the California court
had :held that the state or its agencies could not to-.° |
operate with the United States for somé reason. pe-
- enliar to the state, it is conceivable that this might
have been a question of state law alone (but ef. West
t. Virginia v. Sims,.341 U.S. 22 (1951)). But the. Cali- |
- fornia court did not consider. the state’s ability to co-
operate “with the United States. - It considered the -
@Jnited States’ ability to acquire rights within the
state. It found that ability lacking, Whether the lack
8. based. on federal: orustate law, it. nevertheless pre-
sents a federal question because it involves the ca-
_ pacity of the United States (Wilson v. Cook, 327 US.
474, 486 men) :
IT.. “THESE CASES ARE PROPERLY APPEALABLE.
‘These cases are properly appealable if the validity
ofa federal statute is drawn into questidn and the de-
cision lis against its validity (flournoy v. Wiener, 321 :: |
U.S. 253, 263 (1944)). The validity of a federal stat-
ute is “‘drawn into question”? within’ the meaning: of.
28..U.S.C. section 1257. (1) if ‘‘the ppwer to enact -
| [the] statute as it is by its terms,‘or is made to réad
by construction, is fairly open to,denial and denied
3” (efi. Jett Bros,-Co. v. City of Carroiton, 252
US. 1,6 (1920)). Peat sib en,
_ » In the instant cases it is, submitted that an appeal |
‘is proper. Although the California court interpreted |
the: federal statute, it acs not stop there but also
40.
ae went on: to, hold the statute tev \ Tn’ thig these
cases differ frorh Hopkin€ Savings Ass’n v. Cleary, ©
296'U.S. 315 (4935). There the state court: interpreted
_ the statute to avoid the constitutional issue and went:
| no further (296 oU.S. at 332). The situation here: re-
‘sembles that in Red Cross Line v. Atlantic: Fruit Co.,
264 U.S. 109, 120 (1924), ie:, a reading of the’ Ivatihoe
- opinion as a. whole shows that ‘the California. court ©
reached the result that section 46 of the Omnibus Ad-—
justment Act of 1926 is inapplicable not. merely as‘a
‘matter of statutory construction but because it believed
- such a-result is constitutionally required. This reading
_ Is cor roborated by the court’s own summaries in the
other opinions (47 Cal. 2d 687-688, 713, 306 P.2d 890,
884, AJS, 145, 221). The result is to: prevent the
“> pplication of the federal statute by invalidating the
contracts because they contain the required limita-
tions on water delivery. | Such: a. holding -has beer |
“reviewed by appeal - on. at least ~ three oegasions
Decal v. Wissner, 338 - U.S. 655 (1950) ; Kalb
v. Feuerstein, 308 U.S. 433 (1940) ; Ex parte Wor.
cues Nat.” Bank, 279 °U.S. 347, 359, 360 (1929).
(federal statute held invalid under state constitu- ‘
: tion)).
-In the I ie case the state court’s tiestiment of
the problem of interpretation is-so perfunctory and
_ arbitrary that it is obvious that interpretation actually
play ed no- ral part in its invalidation of the limita-
tion. The state eourt first notes: that the original ver-~
sion ‘of the water delivery’ limitations prohibited. the.
wale of the right to use water for taore than one hun-
#i,, *
_
q dred and sixty acres ‘im-private ownership” (47 Cal.
2d 632, 306 P.2d 845, AJS 40-41). Then with baffling
_ inconsistency “it. fails to. note equivalent language in —
section 46 and goes on to hold that ‘‘section 46 may
: be deemed : to apply to. péblic, yas: alone” (47 Cal.
. 2d 638-639, 306 P:2d 849, AJS 50).
A One peason. assigned f or this sinclenlén Ss that’ “the
| intention of the act {the Omnibus" Adjustment Act of:
; 1 1926] as shown by” section 48, was the development of
» publi¢ lands .....”% (47 Cal.2 26638, 306 P.2d 849,
) ASS 50). Even if this description’ of section 48 of.the
‘act were correct, it is hardly reasénable that Congress
- intended ’a general statement of purpose in one sectjon
of the act to nullify a specific, unequivocal, manda-
tory direction to the Secretary of the Intexgior in an-
. other section<of the act ‘to apply ‘the limitation. to.
privately-owned land. Contrary -to- the California
- court’s assértion? however, sec ‘tion: 48 of the act does —
not eve mention public land. It states:
«The purpose of this act.is the rehabilitation
_ . of, the several reclamation projects and. the in-
a suring: of their future ‘suceess by placing them |
. Upon a sound operative ang Scninges basis, and
the Seerefary of the’ Interioy is directed to ad-
: ‘minister this Act to those énds’’ Sa Stat: 650, -.
43 US.C: § 4238),
: The second: reason - assigned for the conclusion is
4 that it follows because section 46 is ineluded in. Title”
43 of. the United States Code, ‘Publie Lands” (47
+» Cal.2d 6: 3-639, 306 P.2d 848-849, AJS 50). Title 43
Dee a et OE i psinnted inia tngition jaw hen
<y
Paes eae | S
California court has thus ignored the plain language §
of the section. both as printed in the code and in the
statutes at large;.it has ignored: the: rule that even if
- some conclusion could be drawn from the location of
‘the section in. the code this conclusion could not pre- ff
vail over the language of the statutes at large (Ste. phan.
v. U nited. States, 319° U.S, 423, 426 (1943) ; and it has
' ignored. the rule that conclusions as to intorpeaetion
‘cannot. properly be drawn from the location. of a
. section in a ‘ ‘prima facie’’ title of the code (Warner
v. Goltra,:293 U.S, 155, 160-161 (1934) ).
Although the language of the California eourt is in
terms» of interpretation, the: result and .the means
whereby it was reached are SO eccentri¢ that it is in-
credible that the language wag. so intended. The ra-
tional explanation of this portion of the opinion is that -
the California court read out of the statute the lan-
guage, ‘‘Such contragt . . shall . . . provide that all
irrigable land held in private jotttee P by any one
owner in EXCESS of. one hundred and sixty acres...
‘shall [not] receive water... if the owners shall refuse
. fetes] ...’’, because it Bilier ed this result to be consti-
. tutionally ‘eel This explanation is consistent © f
with the balance of the opinion. | ei
45 ay
MM. ‘THE WATER DELIVERY RESTRICTIONS ARE VALID.
_ A. Federal Law Requires Inclusion of the Acreage Limitatidn in .
‘“— . These’ Contracts. ~~ AS
1. The Plain Language of Section 46 flequires the Limitation. 7
- Both the Central V alley Project and the Cachuma
Project are feder al reclamation projects. The Central
Valley Project’ was authorized’ by Congress in sec-.
tion 2 of the Act. of August 26, 1937 (50. Stat. 0):
. which states in aan part:
ce eS ” except as herein otherwise . abttboatiy
provided, the provisions | gf the: reclamation law,
_ .as amended, shall govern the repayment of ex-
penditures ‘and the construction, operation and
-maintenance of the dums, canals, power’ plants,
_ pumping plants, transmission lines, and_ inei-
dental works deemed necessary to said entire
bas oe “pie = ee
Tn United ‘States v. Gerlach oe ‘Stock Co., 339.0. S.
725, 739 (1950), this cqurt held .that the language
quoted above made’ the project a seolapaatson project
subject to reclamation law. :
The Cachuma Project was pathobiaea by the See-
retary of the Interior as a reclamation project ‘in a
‘report and finding of | feasibility: (H.R. Doe. No.°587,
, 80th Cong., 2nd, Sess. (1948), S.B: Df. Ex.: A, R. 647-°
_— 648), pursuant to ‘the procedure set forth in section -
~ 9a) of the Reclamation Project Act of 1939: (53 |
> Stat. 1194, 43 U.S.C. §485h(a)). Tt, ig, thus equally
sunject to reclamation law. .
| The 169 acre.water limitation prov visions of the con- —
tracts are hased on sec ‘tion: 46 of the’ Orhnibus Ad-.
_ . Visions
' 44
: Di
justment Act of 1926 (44 Stat. 649, 43 U. g, C: § 428e).
This secti n is the latest of a series of statutory pro-
ject. In#pertinent part it provides that:
‘*No water. shall be delivered upon the comple-
~ tion of any new project. or 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. . . . Such—
contract: oF éontracts with - irrigation districts
‘hereinbefore referred. to ‘shall’ further provide
that: all trrigable land held in private ownership -
“by any one owner in excess of one Hundred and
__ staty trrigable acres shall he appraised in a man-
terior and the sale prices thereof fixed by’ the
Secretary on the basis of its acttial| bona fide
value at the date of appraisal without reference
to the proposed | construction of the irrigation
works; and that no such excess land so held shall .
-. ‘receive water from any project or division if the
owners thereof shall refuse to execute valid
recordable contracts. for thé sale of such lands
under terms and conditions. ere ce to the
Seéretary of the - Interior. e's (Emphasis
added.) : . '
ow ¢
Obv iously, sada es plain. words of this section, the.
limitation applies to service of water from a reclama- |
tion project to: ‘all irrigable, lands sheld tn private.
awnership pe -by any one owner in excess,of one hundred -
and sixty irrigable acres”’ ’ (See Taylor, Destruction a
of Federal Reclamation ‘Policy? The Ivenhoe Case,
s
-
general applicability relating to tliis sub-
“tier to he prescribed by the § trot Ae the In- -
vr.
45 ee
10 Stanf, L. Rev. 76, 100 et ff, (1957)). The inc .
, gruous efforts of. the California- court ‘to avoid t
plain” meaning have already been discussed as they
have some bearing on the proper remedy before this
_f— court Cop. 40-43 herein). "6
_ & ee
. 2. Section 46 Continues the Original and: General Policy. .
"Section 46 of the Omnibus. Adjustment Act of 1926 ~
~presery es the original and express policy of the Recla-
mation Act hy ‘continuing to apply, the limitation to
-« the delivery of project water to priv ately-owned lands,
| Section 5 of the Reclamation Act of 1902 contained a
similar restriction:
‘No right to the use of w ater for land in private
ownership shall be sold for ‘a tract exceeding 160
acres to any one landowner . . .”’ (32 Stat.. 389,
. 43 U.S.C. § 481). ay
Subsequent statutes of general applicability which -
.. adapted, the water limitation to changing conditions
; made clear that it continued to cover water service to
privately-owned lands. '
The Warret? Act of 1911 authorized irrigators of .
privately-owned land, outside the boundaries of. fed-
_ gral reclamation projects” to use the surplis water
storage or carrying capaeity | ‘of the dams and canals
| of such projects. This’ was. sub sect to the conditions, |
how ever, that:
z oe ee water: so impounded, stored. or carried
* shall not be used other than as prescribed ‘by law
- as to lands held in priv atelsw nership within Gov-
By
+0
—&nment reclamation projects : a (36 Stat. 925,
43: U.S.C. § 523) ; Se
and that:
ne water shall not be’ furnished from any
such reservoir. or delivered through any such
canal or ditch to any. on@ landowner in excess of
an amount sufficient to irrigate one hundred and f
. sixty acres . Py (36 Stat. 9 §26, 43. veer ner -—
ection 3 of the Act of August 9, 1912 OMS T NE 4
ea a ae shall water be furnished under ‘said
_ aets nor a water right sold or recognized for such
excess [i.e.] . . ..in excess of. one farm unit as
fixed by the Secretary of the. Interior, as the limit
- of area per entry of public land or per. single
_ qwnérship- of private land for which a water f|
right may be purchased respectively, nor in any -f
case in excess. of one hundred- and. sixty §
acres... .” (37 Stat. 265, 266, 43°U.S.C. §.544). :
Finally: poms 12 of the Act of August 13, 1914
prov ided:
- “That before any contract is ‘et or neers begun
for the construction ef any reclamation project
hereafter adopted the Secretary: of the Interior -
shall require the owners 9f private lands’ there-
- under to agree to aispoedl of all. lands in excess
of the area which he shall deem sufficient for the
support of a family upon the land in question,
upon. such terms and at not to exceed such ‘price
as the Secretary of the Interior may designate;
and if any landowner shall refute te-agree to the
i: requirements - fixed by the Seeretary of the In-
terior, his land shall not: he included within the
-—
‘ease if ‘ideal: for. conatractiott. seit (38° Stat.
689, 43. U S.C. § 418).
3, The General Policy“Applies Unless Expressly Altered by Congress.
That the 160 acre water limitation. applies to all se
- federal reclamation projects, irrespective of whether
they contain public or: priv ate land, is shown by the. -
fact that. ‘Congress has passed special laws: when a
diff. rent result has been desired. Some’ projects and.
classes of projects have been placed undér special and
; sometimes more ‘restrictive limitations. These are: | 4
1. Sun Rivér, Owhyhee, Vale and Baker Projects
in’ the States of Idaho and Oregon Oh: Stat. 479,
(1926)). | |
2. - - Cohimbia Basin Project in the State of Wash-
— ington (50 Stat. 208 (1937); 57 Stat. 14— (1943), 16.
| U.S.C. §835a; 71, Stat. 590 (1957)). %
» ° 3. San Luis Valley Project in the State of. Colo-
- yado (66 Stat. 282 (1952) ). 7
, 4. Washoe’ aaa in the State of Nevada (70
op. Stat. 777 (1956) ).-
- °~ 5. Small Reclamation te ate wherever author-
ized (70 Stat. 1046 (1956) ).
gE 6. Kendrick lite in. ‘the State of W yemuig
(71 Stat. 608 (1957) )..
j: -4, Hast Bench Unit of the Missouri Basin ped:
ect m the St ate of Montana (71 Stat. 309 (1957)).
. Other projects have heen completely exempted by |
express language. where no limitation ‘wags _ thought
appropriate, as follows : ws | ne
48
_ . “1, Colorado-Big Thompson Project.in the State f
__ of Coloradd (52 ‘Stat. 764 (1938), 43 U.S.C, § 386).
2! Washoe County Water Conservation District.of f
the Truckee Storage Project and the Pershing County
Water Conservation District of the Humboldt River
“Project, both i in the State of Nevada (! 4 Stat. 1219 :
, (1940)). ‘ee : Orne |
3. Owl Creek Unit of the Missouri’ Basin Project |
in Wyoming (68 Stat. 890 (1954)>).
=~ Santa- “Maria. Project in California (68 Stat.
1190 (1954)). | ue :
. Ina somewhat similar category is the Boulder Can- |
yon Projett- Act (45° Stat. 1057 (1928), 48 U.S.C
§$ 617-617t) as it applies to Imperial Irrigation Dis-
-trict.in California. Section 6 of that act pravides that f
water shall be delivered for ‘‘satisfaction of present
perfected rights in pursuance of Article VITI of said [
Colorado River compact”? (45 Stat. 1061, 43 U.S.C.
§ 617e). “Imperial Trrigation District had for many
- years prior to the Boulder Canyon Act diverted water
from the Colorado River through its own works. The
All-American Canal, authorized by the act, provided
a new means for delivery of this. water. ™ nder. these
~ eireumstances the Secretary of the ‘Interior held that
“this limitation does not apply to lands now culti-
vated and having a present water right.” (Hon. Ray
‘Lyman. Wilbur to Tmperia} Irrigation District, Feb. '—
24, 1933.) The Imperial Irrig gation District water de-
| jivery contract, which emits an excess land limitation
| _ requirement, was thereafter judicially confirmed in 9.
sy
“49 |
‘proceeding in which the acreage. limitation was hti-
gated and found not applicable. But when water was
brought by the, All-American ‘Canal to lands in the
.Coachella Valley which had not theretofore been irri-
'_ gated from. the Colorado River, the limitation was
applied and the contract with the limitation was ju-
dicially confirmed (Opinion M33902, May 31, 1945,
| Soliéitor of the Department of ‘the Interior). ie
d to Adopt a Special Policy for the Central
‘There is- similar statutory exemption yy ing to
either the Central Valley Projeet-or the. Cachuma
: Project. To the contrary, the legislative history of the
Central Valley Preject, the project responsible for
most of the agitation in C ‘alifornia against the limita-
tion, supports the conclusion. that the limitation was ©
~ -intended to apply.
First, it was repeatedly ernphasised on the floor of
Congress when the Central Vailey. Reauthorization
Act (50 Stat. 850)’ was being debated ‘that the Cen-
tral Valley Projet was to be a reclamation project.
ow ith a major: purpose of providing homes (81- Cong.
Ree. 3905, 4509, 4516, 4540, 4548, 4561; 6704 (1937) ).
This is an objective which the limitation was de ‘signed. ;
to promote (Montgomery and: € ‘lawson, History of |
Législation and Policy. Formation of the “Central
Valley. Project, 133-136 (U.S. Dept. of Agr: Bur. of
Agric. Economics, 1946), Iv. St. Ex. 9).
Second, shortly after the ‘act was passed, wheh ‘apt.
propriations: for the Central Valley Projeet. were -
OU
being considered by the House Committee on’ Appro- —
priations, Representative Clarence F. Lea of Cali- .
fornia assured’ the committee that because. of the 160. z
acre water limitation the project could: not be. used
‘for the benefit of a few:
- .
..a member of the subcommittee elias the
+ .
. ae a while age about the possibility of this -
improvement [| Central Valley Project]: being
> used for -the benefit of bankers, or those whic
might -become purchasers on account. of the ~ f=
. farmers being’ crowded out through foreclosure,
_.. or otherwise. T. would call attention to the fact,
, which: the committee is ptobably familiar with,
that for several years, it has been the ‘policy. of
the reclamation service to make contracts or to
cover cases where the small ownership could pro-
eure the benefit of contracts for water; the gen-
eral idea being to confine it to those tracts of land
that ‘would he sufficient to maintain one family,
and the Departnient has taken a very decided
position against permitting the reclamation serv--
we to use for speculative purposes and. not for
the benefit of settlers’? (Hearings before House
Committee on Appropriations on. H. R. 6958, 75th
Cong:, Ist Sess. 1597 (1937 2 Re
Phir, at least two rajoP attempts have been —*
to secure Congressional exemption of the. Central Val-
Tey Project from the 160 acre water limitation. This
_ , itself is a recognition of the fact that in the absence
_ of exemption the limitation governs. In 1944, the so-
--ealled ‘Elliot. Amendment” tothe Omnibus Rivers
‘and Harbors Bill CH.R. 3981, 78th .Cong., Id. Sess.) .
was. passed by the House of Representatives, It Agel 1
vided:
“61°
“See. 4. "The excess-land provisions of the
Federal reclamation laws shall not be applicable —
to Jands which will receive a water supply from
the Central Valley Project, California, reauthor-
ized by section 2 of-the Rivers and Harbors Act
approv ed August 26, 1937. Oe i
a tienen,
‘This proposal was rejected by the Senate Committee
-- on Commerce after much discussion. (Hearings before
Senate Committee on Commerce. on H.R. 3961, 78th
Cong., 2d Sess. (1944)). In 1947, S. 912, to’ exempt
the Central Valley. Project and - two. other projects
from. the limitation, was given extensive hearings be-
fore a subeommittee’ of ‘the Senate Committee on
Publie Lands (Hearings before Subcommittee of Sen-
ate Committee on Public Lands on S. 912, 80th Cong.,
‘Ist ‘Sess. (1947)), but - ‘was not reported out.
Statutory language, Negislative history, and Con- -—
gressional activity and refusals to act, thus all lead -
‘to the same conclusion. The 160 acre water limitation
applies to the delivery of water to. privately- owned
: land from every ‘federal reclamation project unless ‘it |
is exempted or subject. to special restrictions by. ex-
_. ‘press’ statutory provisions. Since néither the Central
|. . Valley Project-nor the Cachuma Project hes received.
- such. special treatment; federal law requires the in-
clusion in’ the contracts of the limitation provisions,
which are contained.
aie
B. “The 160 Acre Water Limitation Is a Constidutional Méans gf E
Achieving. Wide Distribution of the: Feder Subsidy, In-
' volved in the Delivery ‘of Irrigation Water From Federal
"’ Reclamation Projects. \ p Siege =
1. The Constitutional Justification for the Limitation.
To provide the water required for the contracts, it
was nec@ssary for the federal gov ernment to construct
: storage and delivery facilities of great size and ex-
_ pense. “These facilities are described in the feasibility
and cost allocation reports on the Central ‘Valley and |
_ Cachuma Projects (Central Valley Project: FLR. Doe: —
No. 146, 80th Cong., Ist Sess: 12-14: (1947) ;. see also —
C Tntted States v. Gerlach Live Stock Co., 339-U.S. 725, |
728-729 (1950): Cachwma PFoject: HR. Doe: No.“587,
80th Cong., 2d Sess: 30-32 (1948)). By -the construe-
_ tion and ‘operation of these facilfties the federal gov-
ernment has’ made available to the irrigators of the .
' Ivanhoe and Madera Irrigation Districts - and the
Santa Barbara County. Water Agéney water which
- they never vefore: were able to receive al Cal. 2d 58, Ee
306 P.2d 861, AJS. 79-80).
‘Under. federal ‘Tee lamation. law, only a part of. the |
cost of the dams, canals and distribution works attrib- —
utable to- irrigation is repayable to the federal gOV-.
ernment by the irrigators, and that without interest.
The ptice of the water to the irvigator is, therefore,
far less than its actual ‘eost. As ‘a result, with the ‘de-
livery ef each acre- -foot of water the irrigator receives |
a federal subsidy. ‘Chie? Justice. Gibson, Aissénting,
explained the signifieahice of ‘this sateidy in terms of
- pereentages (47 Cal.2d 658, 306 P.2d 861, AJS 78-79;
see also Taylor, Destruction of Federal Reelamation
03
Policy? The ‘Ivanhoe Case, 10 Stanf. 1. Rev. 76, 92-
96 (1957)). The magnitude of the subsidy. is not fully
appreciated, however; until it is ‘transiated into dol-
lars. This was done ina letter from six California 2
Congressmen ‘to the Attorney General. of Califernia
after the California*Supreme Court decisions in these
eases had-been announced (Pet. for Rehearing of
"Appellant State of California -to. California Supreme
— Court in Ivanhoe Irrig. Dist. v. All Partiés and Per-
"sons, App. P. ii, contained in record in Case No. 122
herein) : eee ?
Non = SB capital seoatiesi to. wai water on land
-. under the Central Valley ‘Project averages $350
“per acre. If an irrigator owns 1,000 acres, the
capital. investment to;serve his land! is. approxi-
mately $350,000, This money is’interest-free and.
the interest, cost to the federal government. over
thé pay-out «period roughly equals the capital |
iavestment. In other words, the interest on $350,-.
000 over\a 50-year period 1s, roughly $350,000.
‘This is a Wirect. subsidy ‘to ‘the -irrigatar, - Using
the. percentaxes on repayment referred to in Chief
Justice Gibson’s dissenting opinion, the irrigator
will pay back: approximately $123,000. . The: hal-.
ance of the capital investment will be yb ‘by
public power revenwes. This amounts to $227,000. *’
Thus, the total mabeidy to this 1 1,009 acre irri-
gator on up to appr ecinataly $577,000, aes
“The water limitation was. tended to prevent use
of the reclamation service fox: speculative purposes,
- and it insures that the irrigators*, subsidy : and other
benefits of federal irrigation projects will. not. go in
disprops1 ortionate share to a y few large ‘landow ners but
o4
. will be confined to holders. of moderate-size tracts of
land sufficient to maintain one family; its purpose,
in other words, is to distribute the goverpment bene-
ts in accordarice with the greatest good for the
greatest number of individuals’? (Gibson, C. J., a
senting, 47 Cal.2d 658, 306 P.2d-861,,AJS 79). The
| effect of the limitation is. merely to ai a reasonable
maximum on the benefit which any one person can
gain from the use of federal irrigation facilities. The
oe majority of the, California court would reverse it to .
subsidize most those who own most, Without:a limi-
tation, it is obvious: that the larger the Jandholdings
of an irrigator and hertee’ the greater the amount of
project water delivery he requires, the larger would
be his vsssimean from. the federal. gov as a 7
‘¢. Analysis of ‘he California Ccurt’s Holding o ‘of Invalidity: e-
, Despite the common-sense. equity. of the limitation,
- the California court has concluded it deprives owners -
of more than 160. acres’ of land of property without. ,
J due proeess of law and denies them equal protection
: of ny Its reasoning seems to be as follows: .
’ All: the people of, the State of California have
| an wiieaes interest..or title in. the unappropriated °
“domestic waters of the Statey. the Jegal ‘title to which
is ‘held: ‘by the. State (47 Cal.2d 625, 306 Lea “840,
“AIS 30). ee.
2 The equitable interest of these béneficial owners*
<2 in ‘‘an‘' inchoate right’’ to use the water of the state
“subject to like enforcement and equal ‘protection’ of
the law’’, although the right is dependent. on, eom=
¥
5B
plianee with “reasonable -terms and, conditions” (47 .
Cal. 2d 626, 306 P. 2d 841, AJS 31 , B2).
3. Under section 8 of the Reclamation Act of 1902
(32 Stat. 399, 43 U:S. C. §§ 372, 383) the United States
a3 a matter of. federal law has assumed the obligation —
of respecting these State- recognized beneficial rights.
. The United States therefore (a) may not acquire any
rights in the waters of the State for reclamation
project purposes except as, limited by such rights
(1e., it may not a¢quire an “‘unlimited title’); and
(b) may -not deny reclamation project water delivery
to the owners of such rights. irrespective, of the re-
quirement of section 46 of the Omnibus Adjustnient
» Aet of 1926 that this be done (47 Cal.2d 628-629, 639,
306 P.2d 842-843, 849, AJS 35, 50-51). :
4, Tf the United States had the power to acquire
an ‘untimited title”’, i.e., could become the ‘‘owner °
absolute of the domestic “waters of the State’, (47
Cal.2d 639, 306\.P.24 ° 849, -AJS 51) it. then could
: constitutionally apply the 160 acre water limitation —
— - provisions of § 46 of. the Omnibus ‘Adjustment Act
"of 1926 (44 Stat. 649, 43.U.8.€. § 423e) to privately-
owned land in California. ‘But since the United States
in not have that pawer, application of the limitation
is unconstitutional. This is -beeause the limitation re-
‘stricts an owner of excess land in the use and en-.
joyment.of the beneficial right owned by. him in. the
water of the State ‘‘on the ‘sole basis ‘of the amount
of property he owns’? (47 Cal.2d’ 637, 306, P.2d 848,
_AJS 48), .a basis which is arbitrary and unreasonable
and henre constitutes a deprivation of such owner’s:
a”)
ae,
. 2 aa
property, without due process of law and a deiiial
of equal protection of the laws (47 Cal. 2d 636-638;
688, 306 P. 2d. 847-848, 890, AJS 46-49, 145).
5. On* the basis ef the conclusions summarized
above, that the 160 acre water limitation provisions
of section 46 ‘of the Omnibus Adjustment Act of 1926
- are not applicable to these contracts, it follows that
this. section 46 is not an “applicable” federal law _
“within the meaning 6f California Water Code $ec- :
_ tiém_23200 which provides that undér contracts such
as those in question water “‘shail be distributed and |
apportioned by thé district in accordance with .the
‘applicable actSof Congress, the rules and regulations
of the. Seeretary ‘oPthe Interior thereunder, arn the
_ provisions of the contracts? (47 Cal. 2d 639, 306 P. 2d
, $49, AJS 51). : |
3. the Sole Justification for Existence of the Trast in Water of the
State Announced by the California Court Is to Invalidate the -
Limitation. + yi
| Bi should be eatiaind at the ate that despite ‘the
sweeping and ‘formidable language which the Cali-
“fornia Supreme Court majority: used to deseribe the
trust (e.g., 47 Cal. 2d 627, 306 P.2d 841, AJS 32-33),
most of the incidents whieh one would soimatnonsly .
ASSOC riate with a trust are: carefully whittled away.
Bike Gene ‘rally, the right is. subject to ‘ ‘reasonable terTus
and conditions” (47-Cal.2d 626, 306 P.2d 841, AJS,
31). The beneficiaries may: have to organize them- - ;
selves into ‘ ‘proper ly classified groups’’ to be “‘in a
- position. to demand benefits. without discrimination”
(47 Cal.2d 627 , 306- P2d 841, ‘AJS 33)..N otwithetand-
« -
“BT:
" ing the inchoate right, the right to receive water does
not accrue by virtyeof an application to appropriate, »
because an application does, not vest a water right ,
; as part and parcel of a freehold (47 Cal.2d 688-689,
. 306 P.2d. 899, AJS.146).- The trust right does not
help get water to one whose land is excluded from.a-
district (47 Cal.2d 691, 306 P.2d 892, AJS- 150-151)
for a landowner does not have a proportionate owner- —
ship in the: assets of his district (47 Cal.2d 692-693,
306 P.2d 893, AJ S 152). And finally one who physi-
| cally cannot. be served may nevertheless be included
ima district and assessed (47 Cal. 2d 711-713; 306 P.2d
883-884, Ay S 218-221), thus providing another ex-
ample ‘where the trust right does not insure the:
receipt of water. :
Thus, the sole reason for: ‘creation of the trust
seems: to be to provide a device to invalidate the 160
acre water limitation.. But even if one were to aécept —
the existence of the trust itewould not render uncon- —
- stitutional the application _ of the: limitation to de-—
livery of water from a federal reclamation project | |
tu- -privately-owned land. | ; ‘
4. ‘The Effect of Section 8 of the Reclamation Act of 192 on the Power
_ of the United States to Apply the Limitation and Obtain the Neces-
sary Water Rights. ‘ .
Consider first the theory that hides the United
States could constitutionally apply the limitation if
“itavere able to aequire ‘‘unlimited title’’ to the water
whieh it intended to deliver, federal: law forbids. the
United States. not only, (a) from acquiring sie h title,
but also (t b) from denying reclamation project water
58
dations: to the ow ners it the inchoate beneficial rights
(47 Cal. 2d 627 628, 639, 306 P.2d 842, 849, AJS' 33-35,
51). This theory springs essentially f from an erroneous —
interpretation*of section 8 of the Reclamation Act
of 1902 (32 Stat. 390, 43 U.S.C. .§§ 372, 383). The.
language of that section relied upon by thf majority
of the California Supreme Court (47. Cal.2d 627- 628, |
639; 306 P.2d 942, 849, AJS 33-34, 51) reads: ie
‘That nothing in this act shall be construed ee
affecting or intended to -affect er to in®any way |
‘interfere with the laws of, any State or Territory
relating 0 the control, appropriation, ‘use, “or:
| ion\of water used in irrigation or any
vested right acquired hereunder and the Seere--
| tary of the Interior, in carrying out the provi-
sions of this act, shall pr oceed 1 in conformity with
such laws, pene
Citing this court’s : dedision i in U.S. v. Gerlach Live °
Stock Co., 339 U.S. 725 (195 50), as authority (47
Cal.2d 628, 639, 305 P.2d 842, 849, AJS S 34, ol) the =
California Supreme Court majority has given a curi- _
gus construction to this language. It holds that the
provision subjects ‘‘ whatever interest or title the °
United States has acquired to’ water: by appropria:
vig “assignment or by other means of acquisition” .
o “the limitations of title herein determined [i.e.,
: the inchoate: beneficial rights .of the water users
of the ‘State]’’ (47 Cal.2d 628, 306 P.2d 842, AJS 35)
and further that undeé.this provision “state laws re-
main unaffectéd by later [federal] “enaetments” (47
Cal =e 639, ane 2d 849, AJS 51). In effect, the
59 | ©.
California Suprerne Court’s holding is that section
8 compels the United. States to-give specific recegni- |
_ tion to water rights established under state law (1)
. even though: this would violate other and later federal
enactments; and. (2) ‘even Gough the. anthority * to
acquire the rights needed to construet and operate
‘reclamation projects is expressly granted by. .other '
statutes (53 Stat. 1197, 43 U. S.C. § 389; 50 Stat. 850;
a} ‘Stat. 389, 390, 43 U.S.C. §§ 373, 421) ; and (3) éven °
though this court-has recoghized that some rights for -
the. - project have been acquired under the United .
‘States’ power of. eminest domain (U. 8S. ®. Gerlach
Law e Stock Co, 339 U.S. 125, 739 (1950)).
This construction of section 8 not only patently
violates thé common-sense canons ‘of statutory inter- |
pretation, that the later governs the earlier and that
the specifie governs the general, but is also’ contra-
' dicted by the authorities. The only case ‘cited by the
‘California Supreme - Court is U.S. v. Gerlach Live
Stock Co., 339 U.S. “125 (1950).. But, on this issue,
that case held only that if property rights established |
“under state law are taken by the United States ‘in
connection with the building and operation o& a fed-
eral reclatnation project, the ow ner is entitled t¢ com-
~ pensation. The Gerlach case did not even suggest, nor
hasgny other case before those now. ‘being appealed,
that section 8 constitutes either: .(1) an anticipatory
repeal ‘of later federal enactments in fav or of the
‘presuined requirements ‘of state law; or (2) a relin-
quishment, of the power. to condemn state recognised
water rights.
- 60
As to ‘the first point, this court in ohana ve
‘Wyoming, 325 U.S. 589, 615 (1945),. construed sec-
_-tion 8 quite’ differently.: ‘We do not suggest that
~ where Congress has provided a system of regulation
- for federal projects it must give way before an in-- —
consistent state system”.
As to the second point, the Gerlach case Haekt. in-
volved a taking of water rights ° ‘established under.
state’ law. The taking was necessary because satisfac-
tion of those rights by delixeries would -have depriv ed.
the Central Valley Project of water needed for*its ©
planne# operation. In our ‘cases if ‘‘unlimited title”’
- in water-rights is really required to enable the United He
States to apply the limitation, the justification for a
taking of the outstanding. inchoate beneficial rights-is ,
: even plainer—the necessity, to obey ‘an express man-
, date of federal law. The fact that those rights are de-
| scribed as being held in trust rather than absolutely
_ cannot weaken ‘the power to ‘acquire what ‘is néeded —
‘(United States y. ‘Carmack, 329 U-S. 230, 239 (1946) ). ,
If comipensable- rights have’ already been taken,
compensation may. be had,.as in the Gerlach casé, by.
assuit for damages under the Tucker ‘Act (28 U.S.C.
§§ 1346(a} (2), 1491). But, as: pointed. out by Chief
Justice Gibson dissenting in: the I vanhoe ease ‘the
problems of compensation are not within the issues.
of. this proceeding” (47 Cal.2d 658, 306 P.2d 861,
AJS. 79; cf. Yebrsley v Ross, 309 U8. bas 21 Stee
on. which the California Supreme’ Court majority®
“A
61
\*
5. The Limitation Does Not Deprive Cuxanit of Excess Land ofAny
Inchoate Beneficial ‘Water Righis Owned by Them ‘Without. Due - -
Procéss of Law and Does Not Deny Them the — Protection. of
the Laws. °
- Since the United States is empowered to secure
“unlimited title” in the water to be-delivered, if such
title is necessary to ‘apply the limitation, the predicate
rested its conclusion. of unconstitutionality: of the ©
limitations fails. But even. without considering the
United States’ undoubted power of eminent domain,
it is clear. the’ egnelusion cannot stand. Analysis re-
veals plainly that the 160 acre’ water limitation does
~ not deprive anyone of. the inchoate beneficial rights
which he may hhave in the domestic waters of Cali-
‘fornia. pe + i
The limitation is a restriction on the service which
can be received from fedeyally-financed. irrigation’
works. The water users remain as free“’As they ever
were to perfect whatever property right they- may
have in the undeveloped waters of the. State. Their
“use and enjoyment of such property right is involved . :
here only because they desire to use- and enjoy it
‘through project w orks financed and constructed by
the United States. Whatever the nature of the right ©
they may have by yirtue of state law in water as it
flows i in its natural state, this cannot’ conceivably: give
them a property right in the avorks of the. federal 7
sovernment. . Any. such. right must he derived from *
federal law, which requires the 160 acre water. limita-
tion. Therefore, the restrictions on the use of federal
. project facilities for delivering’ w ater to excess land, ,
oo
62
imposed by the ‘Himitetion: do not deprive the owners:
of any property ‘possessed by them. . 7
Of course, the “excess”? landowners hoped to enjoy
| Bi the full the increase in valiies due to. the presence
ofa reclamation project (Tay lor, Destruction of Fed-
eral Reclamation Policy? The Ivanhoe Case, 10 Stanf.
‘L. Rev. 76, 92-96 (1957 )). ‘But frustration of a hoped |
' for economic adv antage is not synonymous with tak-
ing of property (U.S. v. Willow River Co., 324 US:
499, 502-503 (1945)). The situation can well. be de-_
scribed in the language of this eourt in Wickard* a
Filburn, 317 U.S. 111, 133 (1942):
‘That ‘alata is the worse off for the aggre--
- gate of this legislation does not appear; it only
~ appears that, if he could get all that the govern-
ment gives and-do ‘nothing that the government
asks, he would be better off than this law allows.
_ To deny. him this is nat to deny him due process
of law.”’
‘Nor, in the light of the subsidy involved: in. project
water service, as explained above (pp. 52-54 herein),
doe’ the limitation. deny equal pr otection of the laws?
Actually there is no problem of discrimination at all.
Every water usér within the contracting district ‘is
treated with equality. Each is entitted to delivery
‘ of a surface supply of water from the project _ 160 ‘
acres of land owned by him. .
~ But even if the limitation is potiniderea as creating
a-classification, it Is a- -reasonable classification, . made.
for the purpose of preventing the undue. concentra-
tion of the benefits of the program, ‘The power to.
™ s
a
- ¢ondition equitably the receipt of governmental bounty. |
is inherent in the ver} power to distribute such bountv:
_ in.the first place (Wiékard v.-Filburn, 317 U.S. 111,
133 (1942); Steward. Machine Co. v. Davis, vets US.
548, 584-585 (1937)). 7
e:
4. Rectien: $6 cf the Cnistbne Adjurimesl Ags ot 2900 Ie'en “Sip
plicable’’ and ‘‘Relevant’’ Act of Gongress Under California Water
Code Sections 23197 (a) and *232060. .
The California Irrigation District Fede vai Coopera- :
tion. Law (California Water Code $%§ 23175 et seq.)
authorizes Jrrigation districts ‘to. ‘‘eooperate and con-
tract with the United States under the Federal Recla-
- mation Act of’ June 17, 1902, and all acts amendatory
“thereof or sajiplémentary thereto .. .”’’ (Calif. de
Code § 23195) for the. purposes, among others, of ‘
water supply”’ or ‘ ‘accomplishing any-of the purposes
of the district’? (Calif. Wat. Code § 23196(b), (g)).
Califor nia Water Code sections 23197 (a) ‘and 23200
preseribe the following rules for distribution of the
water so provided: |
493197, Ina contract made. _pursant to sec-
tion 23196 a district may include provision for
_* either or-both of the following: :
_ “(ai) Delivery and distribution. of water for
' the iand in the district under the relevant acts of
Gongress- and the rules and regulations estab-
lished thereunder.” |
* & . : .
93900, ATI ee the right to ‘he use .of
‘which is acquired by a district under any contract
with the United States shall be distributed -and
apportioned by the district in accordance with the
64
applicable acts of Congress, the rules and regu-
lations of the Secretary of the Interior there-
% under, and the provisions of the contract, and pro-
» vision may be-made in the contract for the reftisal |
“of water service to any or.atl land which may be- _
come delinquent in the payment of any assess-
ment levied for the purpose of carrying out the
contract. fy Cimpeets ames ee , me
‘The. ‘power of irrigation ‘diatviots to cooperate and
contract with the United States as set forth in the
_ Irrigation District Federal Cooperation Law is. also
expressly ‘extended to the Santa Barbara County .
Water Agency (Santa Barbara County Water Agency .
Act, § 6, Calif. Stats. 1945, ¢. 1501, pe 2787).
In the previous discussion,. we have shown that the :
160 acre water limitation previsions of’ section 46 of
the Omnibus Adjustment Act of 1926 apply to ‘the
delivery of water to privately-owned land as a matter
of federal law and that they are constitutional. It
follows, therefore, that section 46 is one of the ‘“rele-
_ vant’’ and ‘{‘applicable”’ acts of Congress referred .to
in'-California Water Coa. section¢ 23197(a) and
93200 as controlling . the delivery, distribution and
apportionment by. the contracting districts of the
water made available by their federal contracts,
The opposite holding by the majority of the Cali- ‘-
fornia court (47 Cal.2d 639, 306. P.2d 849, AJS 51) |
was based on thetr conclusion that the limitation ean-
not constitutionally be applied because the United
States cannot aequire an ‘“‘unlimited title’’ in. the
65
water. If that conelusion falls, obviously SO" does the
holding derived from it. ,
- It follows also that lfad the Califc ornia court reached -
. the right conclusion on the questions of the applica-
* bility and constitutionality of the limitation, it-would
of necessity have changed its holding respecting: :
California Water Code § 22250. Their. holding was
that the general rule of water apportionment for irri-
gation districts prov ided by that code section governs
the distribution of water regen under federal con-
tracts, i.e., that there are ‘‘ne pertinent exceptions’’
‘to ‘that rile (47 Cal.2d 636, 306 Pp. 2d 847, AJS 46-47).
‘The correct holding, of course, is that California
Water Code gections 23197 (a) and : 23200, providing
‘in effect for apportionment of water in accordance -
with the 160-acre water limitation, are pertinent. ex-
as ceptions, to section 22250 in situations where the w ater
is received pursuant to feder al contracts. Insofar As
thé Santa Barbara case is concerned, however, Water
Code section 22250 is irrelevant in any event. This is
because it applies only to irrigation districts and has
no equivalent in the Jaw governing the Santa Bar-_
fe
hara County Water Ageney or any of its member
units.
These questions ostensibly invoWing construction of
state laws ate actually federal questions because: (1)
they relate to the capacity: of the United States, the
title it @an acquire fer a federal purpose, and its
‘obligations, if any, under state law: and (2) the state
law by its own terms is made dependent on ‘federal
law ( pp. 33-36, 38-39 herein).
;
_ ©
IV. THE PROVISIONS OF-THE CONTRACTS RELATING TO
_ WATER DELIVERY AND PAYMENT ARE VALID.
- A. These Provisions Conform Literally With Federal Law. .
The United States has been constructing and oper-
ating projects to irrigate arid and semi-arid western:
lands since the enactment ‘of the Reelamation Act of
1902. The basic feature established then—deliv ery of |
irrigation water from works constructed with Goy-
ernment funds under contracts providing for the re-
covery from the water users of construction costs |
without interest over a period of years—has been
maintained to this day, although the. niethod of re-
covering the. eosts haa? been changed from time’ to
_ time, and the portion of the costs recov erable has been
decreased.
Originally, the. repayment period was 10. ‘years’
‘(Reclamation Aet of 1962, § 4; 32 Stat. 389, 48 U.S.C.
§ 461).:The period was changed in 1914 to 20 years
(Reclamation Extension Act of 1914, $$ 1, 2, 38 Stat. |
686, 687, 43. U.S.C. §§ 471, 472, 475); in 1924 to an -
indefinite period determined by the productive power
of the lan@ (Second Deficiencs Act of 1924, §4(F), —
43 Stat. 702, 43 U.S.C. §4-473, 474) ; and jn 1926 to 40
years (Interior Dept. Approp: Act, 1927, 44 ‘Stat. 479;
Omnibus: Adjustment Act of 1926, §6 45, 46, 44 Stat.
648-650, 43 U S.C. §§ 423d, 423e). :
Today recov ery: of irrigation construction eosts is
governed by sections 9(d):and $(e) of the Reclama-
~ tien Project. ‘Act of 1939 (53 Stat. 1195, 1196, 43
LFES.C. $$ 485h(4), 485h(e) ) as amended by. the Act
of July, 2,-1956 (70. Stat. 483, 43 U.S.C.A- § 485h- :
io
? ‘ i : 67 e
(1956 supp. y). Section 9(d)° provides for a ,40- -year.
period .of ‘payment by the contracting dinkrict of a
specific amount of money computed ‘to be. its share
of the construction cost of the works which serve it;
this payment period starts to run after an initial de-
‘velopment period of not more than “10 years, Section
9(e) provides. an ‘heen: to section | 94) as
‘ follows: 3
"Tn Feu of See into a repayment contract
pursuant to the provisions of subsection, (d) of
this section to cover that part of the cost of the: -
eonstruction.of works connected with water stip-
ply and allocated to. irrigation,-the Secretary, m
his discretion, may enter into either short- or
‘Jorig-term’ contracts to furnish water for irriga-
tion purposes. Each such contract shal! 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 eost and an: appropriate share of
“such fixed charges as the Secretary deems proper,
due consideration being given to that part of the —
eost 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. ee
water for irrigation purposes, the costs of an
irrigation water distribution works constructed “i
the United States in, connection with the new
project, new division of a project, or mpplemenital /
works on a project, shall be covered by a re-
payment contract entered. into pursuant to sa a
subsection (d}.”’ : 3
= I
¢
vA
© °° 6S -
The key requirements of the type of. contract au- ©
— by this statutory prov ision are as follows:
{1, This type of eontract may be used ‘ ‘in lrew”’ of
a repayment contract pursuant to the provisions of
-subsection (d) of. section 9 to cover that part of the.
cost of the ‘construction of works connected ‘wit :
water supply and allocated to irrigation.
“2. Either short “or long term contracts to furnish.
water for irrigation. purposes are authorized.
3. The fermi of any contract. may not exceed forty :
.years. ©. : ae ined ae |
= Y The cantradts must “provide for. she for the
furnishing of water which in the. judgment of the
‘Secretary of the Interior will prod“ce revenues at
least suiicient to cover an appropriate share of the.
annual operation. and maintenance cost and an ap-.
iets propriate share of sucli 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 alloeated to irrigation. The
Department of the Interior has construed this to
mean that irrigatiori construction costs may be re-
covered by means of 9(e) contracts i in any reasonable
period within the useful life of the project and need . |
not be recovered within the 40-year term of. the initial
contract with a district (Opinion of the Solicitor of
the Dept. of the Interior (M-35047, May 24, 1948)).
This administrative interpretation has been oemeved
by Congress in legislation enacted in 1956 (70 Stat.
3 483, 43 U. S. C.A. § 485h- 4 hase supp. )).
oy
&
5. The contracts” must provjde for ‘payebents of.
_ these’rates each year in ads ‘ance of deliv ery of water.
for said year, | \
The provisiows relating to irrigation water delivery
and ‘payment in the>three contracts: with the United °
States in issue in these cases (Ivanhoe contract: Arts.
10-17, R. 17-25; Madera’ contract; Arts. 3-11, R. 192-
1-202; Santa ‘Barbara. Contract: Arts, 10-17, R. 482-
493) conform faithfully to the requirements af sec-
tion 9(e) as listed above. The provisions are in lieu
of a general: repayment obligation payable in“ forty
years as would otherwise have been required under
section ‘9(d); they undertake to furnish water (e.g.,
-Ivanhoe eontract, Art. 1+, R. 17-19) for irrigation
_ purposes ‘ (e.g., td., Art. 17, R. 25); the term’ is
forty years (e.g., td., Art. 10, R. 17); and the rates.
for furnishing of water included therein (e.g., id.,-
Art." 13(a), R. 19) are based on the judgment of
the Secretary of the Interior that sufficient revenue
“will be produced . to eover an appropriate share of
the annual operation and maintenance cost of the
particular. project and also to- return. tothe fed-
eral government in a period greater than 40 years
but within: the useful life of the project. the portion
. of the project construction cost -allocated for repay-
“ment by irrigators (Central Valley. Projeet: H.R.
- Doe. No. 146, 80th Cong., Ist. Sess. 5,. 9-10, 17-22
: (1947) ; Cachuma Project: H.R. Doe. No. 587, 80th
Cong., 2d Sess. 22. 33-34 (148), S.B. “Df. Ex. A, CR.
' 647-648). a
The Santa Barbara County Water Ageney: nesiliaiud
provides for delivery of water fer. municipal water
70,
®
supply purposes in addition ‘to irrigation. The cons’
tract provisions covering “delivery and: payment of
that supply conform to the requirements of alterna-
tive (2) of. section 9(e) of the Reclamation Project
Act. of 1939 (53 Stat. 1195, 43, U.S.C. § 485h(c)).
Section 9(e) provides in pertinent, part:.
‘“‘The Secretary is authorized, to enter into con-
tracts to furnish water for municipal water sup-
ply or miscellaneous purposes:, Prov ided, That
_ any such contract either (1). shall. require repay- |
‘.- ment to the United States, over h period of not -
sto exceed forty-years from the year in which
water is first delivered for the use of the con-
- &
tracting party, with interest not exceeding the:
rate of 31, percentum per annum if the Seere-
tary determines an interest chargé to: be proper,
' of ‘an appropriate share as. determined by the
Secretary of that part of the construétion costs
allocated_ by him to municipal water supply or:
'. otker miscellaneous purposes; or (2) shall be for
such period, vot.'to exceed forty yéars, and at
such rates-as in the Secretary’s judgment will
produce revenues, at least sufficient to cover an.
3 appropriate share -of the annual operation and
maintenance cost and an appropriate share of
such fixed charges as the Secretary deems proper,
and shall require the payment of said rates each
' year zn advance of delivery of water *for said
“year.” lah ae :
Alte: rnative (1), of peers 9(¢) resembles: section
9(d) in that both provide for a, fixed construction cost |
obligation. Alternative (2) of section 9c) is: analo-
gous to, section 9(e) in that both provide for furnish-
ing water at rates designed to cover an appropriate
. 3 iL |
share of the project's fixed charges, without stating
a maximum period for full recovery of construction
‘costs. a i
‘
‘
B. Analysis of the ‘Objections of the California Court to the
Water Delivery and Payment Provisions.
‘Despite the fact that the water delivery and’ pay-.
‘ment provisions of the three. contracts faithfully con-~
form to the requirements of these sections of the law,
the majority of the California Supreme Court -has -
“eoneladed . that they are invalid. This conchision was’
oe on the following holdings: :
Applicable ; federal law requires that a water
oe contract between the United States’ arid an irri-
gation district ‘‘specify a specific amount of money, to:
“be repaid i py the district in 40 years,’’ as the district’.
obligation. for repayment of the cost of construction’
of all storage and delivery works. serving it, which
these contraets do not,do (47 Cal.2d 630-631, 639- 640, |
688, 306 P.2d 843-844, 849-850, 890; AJ® 38, 52, 145). -
2, The water delivery provisions of the contracts,
by implication or otherwise, purport’ to grant to the
United States the right to distribute w ater to con-
-sumers at a pri¢e without compliance with the laws of
California relating. to the regulation and eontrol of
publie utilities i the distribution of the State’s do-
mestie water ; this is iti conttict with controlling fegerals. ‘
e
The Cqurt did not discuss the legality. of the municipal ~water
supply provisions of the Santa Barbara contract, but inferentially
its views on,section 9(e) seem: to apply equally to section 9(¢) (2).
Our discussion will similarly’ be restricted henceforth fo section
9/€)- but the principles discussed. are. equally applica able tor sec:
tion 9(.¢).
ta
; law, see ‘ction 8 of the’ Reclamation Act of 1902 hich
requires the U nited States . to comply with such. laws:
eS : California (47 Cal.2d) 641-642. 644, 648, 688, 306
».24 851, 852; 854-855, 890; ATS 54-6, 58-59, 64, 145).
a * To the extent that the w ater deiivery provisions
of the.contract, by. implication or otherwise, reserve f
“to the United States the right at its discretion to dis- |
continue water serv ice at. the end of the contract term,
= those. provisions are ‘‘contrary to well established
constititional principles. and protections’’ (47 Cal.2d
543, 688, 306 P.2d 851, 890, AJS, 56 » 145).
&, Federal Law Does Not Recairs That a “Water Supply Con.
“tract Under Section 9(e) of the Reclamation Project Act of
1939 Contain a Construction Qhligetion for Lasce sae by
the District in 40 Years. .
Ue The niajority of the California Supreme Court con- |
eluded that:
66
“¢
. applicable sehen law requires ‘that. the.
i contract specify a specific amount of money to be
repaid by the district-by installments, within 40. }
years; that this is an obligation: for repayment |
/ of the cost of construction of storage and delivery
‘works, and that the payment by the district be
credited against this obligation.’’ (47. Cal.2d 640,
306: P.2d 849-850, AIS 52).
This conclusion is correct only insofar as the eon-
trac t concerns the recovery of costs expended for con-
struction of a distribution system to distribute water
to the district’s water users within its’ boundaries. The :
last sentenze of section 9(e) expressly. requires that t
such cost be ec vered by a 9(d) type contract. Accord-
ingly, Part B in the Ivanhoe and Madera contracts
- establish a total distribution system construction ob- *
oT ligation, a repayment period, annual installments and
provisions. for crediting payments against that obli-
gation (Ivaihoe contract, Art. 19, R. 26- 28; Madera
contract, Art. 13, R. 203-205).
' But the conclusion is clearly not correct with respect
} to. payment for water delivery from ‘storage and -de-
livery. works” common to the entire project when the
9(e) «lternative type. ef-contract is used. The plain
words of section 9(e), as we have previously noted,
7] show that it differs from section 9(d) in not requiring
the, “specification of a specific amount pf, money for
payiment in 40° years as the district’ s obligation for
repayment of the ¢ost.of construction of the project’s
main water supply features, and in permitting in-
stead the type of arrangements which the contracts in
ssue contain. |
If there ever was any doubt that sialon 9(e)
a) authorizes water supply contracts like those in. issue
| in these cases, there can be doubt no longer since the
‘Act of July 2, 1956 (70 Stat. 483, 43U.S.6.A. § 485h-1
(1956 Supp.)). The’ purpose and effect of that act .
- were explained in the report by the House Committee
on Interior and Insular. prot on ELR. (101, the bill
which was enacted: . ., ns ee )
PURPOSE OF THE BILL
“This bill relates to the.administration by the —
- . See ‘retary of the Interior of section 9, subsections
(d) and (e), of the Reclamation Project Act of °
1939. It would alleviat® sev eral major objecticns
.
74
Be. .
that ‘have been directed against the type of con-
tract—-sometimes ‘¢alled a ‘water. service con-
tract’ or a ‘utility-type. econtract’—which has-been -
written by virtiie of sectioagy9(e) of the Reclama- «
tion Pre jee Act of 1939. These: objections or com- -
es
: plaints are (1) that no assurance ean be given in
the contract itself or in any other document bind-
ing upon the’Government that the contract will be.
' renewed upen its expiration; (2) that the water
users who have this type of contract are not: as-
sured that they will be relieved of payment of”
-eonstruetion charges .after the Government has
. recovered its entire irrigation investment; and
_ (3) that the water users are not assured of a
‘permanent right’ to the use of water under this
_ type of contract.
yg ‘EXPLANATION. OF THE BILL
“With respect to renewal, this legislation di- -
rects the inclusion in any long-term: 9(e) type con-.
tract—that is, contract the:term of which is more
than -10 years—of provision for. renewal if the
contraeting organization so requests. Such re-
’ newal would take ‘into consideration increases oF. .
‘deereases in construction, opération and, “mainte- ,
nance costs, and improvement or deterioration i in -
the contracting party’s repayment ability. _
‘There are two provisions in the bill which as-_
sure credit toward repayment and eventual repay-
ment of construction costs. First, the bill directs
- the Secretary of the Interior ‘to credit each year,
toward_ repayment-of-eonstruction costs, so much
_of the amount paid by the contracting organiza-
tion as is in excess of the operation and mainte-
nan¢e expefises for that.year. At such time as the
75 :
sum of sueh credits is equal to the amount estab-
lished as. the er ganization’ s appropriate share of —
~ the construction cost, then, \no construction com-
ponent will thereafter be included in the water
charges. . Secondly, | it. provides that a long-term
‘contract entered into under section 9(e) can be
, time as the amount of the construction costs ‘re-
. maining to be repaid: can be repaid within the .
~~ term of a contract, under section 9(d). ’
‘‘With respect to assurance of permanent ‘water
service, the bill prevides that any party to any
contract entered into pursuant either to section
9(e) or section 9(d) will have first right to a.
_ stated share of te project’s available water —
supply during. the term of. the contract or any
renew! thereof. ‘Tpont cpmpletion of payment of -
that part of the ‘construction ‘cost assigned for .
ultimate return by,.the contracting organization,
the right to a.statel share of the project’s water
‘supply would become permanent.” (H.R. Rep.
No. 1754, -84th Cong: 2d Sess. .2. ere : ae
The bill was sintilarty understood by the Senate
| ~ Conmmittee on Interior and Insular Affairs, - which
— stated in its report (Sen. Rep. No.: 2241, 84th Cong.,
2d Sess. 2 q 956) ) : } .
| “The cominitiee concurs fully with the views
a and Insular Affairs in Report No. 1754.
“The Senate Committee on Interior and Insular
' Affairs, to whom was referred the bill (H.R. 101)’
relating to the administration by the Secretary
_-- converted to a contract under section 9(d} at such - ;
* 76
_ of the Inter rior of section -9, subsections (a) and
(e), of the Reclamation Project Act. of 1939, hav-
ing considered the same, report faverably thereon
Ww ithout amendment and. recommend. that the bill
do. pass.
“PURPOSE OF THE BILL
“The bill is directed toward perfecting the basis
_ for the administration by the Secretary of the.
Interior of subsections (d) and (e) of- Section $
of the Reclamation Project Act of 1939. Its pro-
visions would make it possible for the Seeretary:
of the Interior in approving so-called ‘water
‘seryice’ or ‘utility type’ contracts to meet objec-
tions that have heretofore been made to agree-
ments written, under interpretations by the De-
partment, ‘of section 9(e) contracts.
“The three major objections that. are met’ by ‘
the bill are (1) that no assurance can be given in
the contract itself or in any other document bind-
‘ing upon the Government that the contract will
. be renewed upon its expiration; (2) that the
water users who have this type of contract are |
‘not assured that they will be atiovea: of payment,
_, of eenstruction charges after the Government. has
recovered its entire -irrigation investmént; ands
(3) that the water users .are not anouired: of: a
‘permanent. ech to the use of water under this
- type of contract, - |
. “The so-called water service or utility type con-
tracts as authorized by the Reclamation Project
Act of 1939 represented ari innovation in reclama-_
tion law. For-several years, water users’ organiza-
tions were reluctant to enter into contracts of
* these types because of the objections cited. *How- —
Ce
ever, in- the last 10 years more than 35 Q(e) -
contracts containing its provisions have been ap-
proved. Twenty- seven of the contracting organi-
zations are in California with-others in the Mis-
squri. River Basin project area. Thus, it would’
_ appear that the principles of the two sections are
_ generally accepted, but‘ it has been recognized.
that the contracting organizations were entitled to
consideration which the legal advisers of the De- -
partment held were not specifically authorized by
the 1939 act. | ABS (tt 7
kes |. O CHANGES IN EXISTIN G LAW
| “oH. R. 101 avoids any amendnient to the text
_ of subsections 9(d) and 9(e), but lays down the
~ eourse to be followed by the Secretary of the _
terior in administering the law. eg
i
The act expressly . recognizes that a ‘specific ¢con- -
_Struetion obligation for full repayment by the con-
tracting: district within 40 years need not be provided
in a 9(e) contract. It states that in jong-term: 9(e)
- contracts | hereafter entered into, if the contracting oh
district so requests, -prov ision shall be: included (a)
for renewal of the contract under ‘Stated ‘terms and -
conditions which shall -provide for_changes in the
charges to reflect changes i on, “operation —
and maintenance eosts ($ 1( i) > and ( bh) for conver-
sion of the. contract into a 9(d) contract at, such time:
as the remaining amount of constraction’ cost which =
- ig properly assignable for ultimate return by the
organization ean probably be. repaid ¢o the United
States within the term of a 9(d) contraet (4 1(2)),
a
78
The conclusion of the majority of the California a
Supreme Court that federal law now has, or previous -t
to the enactment of this 1956 ‘Act had, an inflexible’
‘requirement: that all water deliv ery contracts provide
for repayment of a fixed obligation within 40 years
is utterly irreconcilable with the foregoing provisions
_ of the act. -In addition, it is significant that the recom-
mendations of the Bureau of the Budget that the bill
" require the establishment of water rates which would
repay, the irrigation investment ‘over a period of'not §
‘more than 50 years (H.R. Rep. ;No. 1754, 84th Cong., ©
2d Sess. 6 (1956)) were ignored. The plain - impli-
cation. in the act is thus that. there -is no fixed maxi-
mum: period for recov ery of irrigation | costs.
_ The act expressly recognizes also that provision for
giving credit to the contracting district for the portion |
of the. payments that exceed. its share ef the project’s.
operation and maintenance cost need not: be included .
as part-of the written 9(e) contract, but rather that.
| e “eredit shall henceforth be. given simply as a matter of _§
administration of: both existing and new 9) con-, §
sap (§1 (3))s |
«. ai +» The act requires that the Secretary of the Interior
Sw establish a construction ‘obligation for each con-
etfacting district as soon as he can feasibly do so, but
” there is no requirement that even after this obligation
is fixed it be stated in /the 9(e) contract (41 (3)).
_ Of course, total construction cost may: not be eapable
of being fixed: for many years after water is first, E
available, espex cially in large and expanding projects
which’ are built over a long. period of years.’ For ex-
(9.
- ample, the first long-term 9(e) contract for delivery.
of water for irrigation from the initial units of. the
Central Valley’ Project was signed in 1945 (Mont-
‘= gomery and Clawson, History of Legislation and —
Policy Formation of the Central Valley Project 171
(U.S. Dept. of Agric., Bur. of Agric. Econ. 1946), .
Iv. St. Ex. 9). . Sinee then, the project has -been,
4 augmented by authorization of the American River?
| Basin Development. (63 Stat 852), the Sacramento
Valley Canals (64 Stat. 1036), and the Trinity River
4 Division (69 Stat. 719), none of which has yet’ been
7 SS. | 3 oe
—-p, Federal Law Is Not Violated by the Fact That the Water.
Delivery Provisions of the Contracts May Not Be-in Con-
formance With State Laws and Regulations Concerning the
- Control of Public Utilities. ~— ae
| The majority of the California court has opidiciened
. the water delivery and. payment provisions of the con-
| tracts as. violative of: federal Jaw on the ground that
| they provide for activities ““hy-passing”’ state public
utility law: The majority declared:
‘The effect of the validation of this contract:
would be, impliedly at least, to approve & pro-
eedure by which the United States as a purveyor ~
~ of the domestic waters of this state, might con-~
- tinué indefinitely to by-pass the established law -
of the state and. procedures thereunder applicable
to water services generally; =. q.
/ “Tn furnishing its domestic waters to. consum-
ers at a price, the activities of the United ‘States
under its purported construction. of. section 9(e)
resemble those of a public utility acting in a pro-
' SU
prietary capacity. As above noted, the. Reclama-
‘tion Act of 1902 provided that: ‘Nothing in this }
act shall be construed as affecting or intended to
_ affect or to in.any way interfere’ with the laws f
of any state or territory relating to the control,.
appropriation, use or distribution of water used
‘in irrigation, or any vested right acquired there-
under.and the Secretary of the Interior, in carry-
ing out the provisions of this act, shall proceed in
conformity with such laws...’ It may fairly be
said that the foregoing federal statutory provision
. remains in full, force; that it @mtrols the opera- |
tions of the Department of-the Interior so far as |
federal law is concerned, and that under’ the con-
» trotling state law, the furnishing of water to con- |
sumers by a utility must be ‘subject to and be in
conformity with certain rules and regulations
_ established by or-under the authority of the Con-: f
. stitution and the. statutes of the state’? (47 Cal. |
ad 642, 306 P.2d 851, AJS 55-56). aid )
Here, again, as ‘in its consideration of the validity Ff
of the 160 acré water limitation, the California Court f
has erroneously construed § 8 of the Reclamation Act
of 1902..We fintl it necessary, onee again “to refer to _
this: Court’s statement in Nebraska v.- Wyoming, 325
US. 589, 615 (1945), that where Congress has pro-
vided a ‘system of: -regulation.. for federal projects,
seétion 8 does not eomniie 1 that system to give way §
hefore aii inconsistent state system. Here, as we have -
shown, in ), 9Ce) Congress has prov ided_a system for
delivering ater and recovering irrigation COSES, As
: long asthe contracts in issue are consistent’ with that
section, federal law is satisfied, irrespective of the —
>
OL
fact that the contraéts may cast the United: States in
‘the role of a public utility in a manner deemed con-
, trary to state law regulating public utilities.
ig ae is our position; showev er, that there is nothing in -
: “the contracts er in the law-on which they are based,
which in faet. compels the United: States te become: a
public utility. - anaes |
|. First, the Act of July 2, 1956 (70 Stat. 483, 43
—*US.C.A. § 485h- 1 (1956 Supp.)) discussed aboye, sets
at rest any doubt-as to the repayment. objective of
9(e) contracts. Consistent With the prior administra-
t tive interpretation of § 9(@) by the Department of the
Interior, the Act provides for inclusion in the’ rates
‘for water delivery: of a reasonable construction com-
ponent (§.1(6) ). When the contracting distyict’s share |
| of the construction obligation has been recovered —
through paynjent of these water rates, no further con~
struction component 1s 3 to be included ($$ 1(3), (6)).
Second, there was no reference or citation of any”
sort by the California Supreme Court majority to.
the “established law of the ‘state and proc dures
| theretinder, applicable to water services genefally,’”’
| . the “certain rules and regulations established by or
: under the authority, of the Constitution .and the stat-
utes of the state’’ (47 Cal2d 642, 306 P.2d 851, AJS ©
f 55-56), or “the laws of the state, both constitutional
t and statutory, “respecting the regulation and control
| of public utilities iri this state” (47 Cal.2d 644, 306
| P2d 852, AJS 59)- -which the majority feared would. -
be violated by the/9(e) contract. Nor was theré any -
— explanation as to’ just how. the 9(e) contract would.
dz
violate them. We submit that these. omissions were not \.
fortuitous. There- simply: is not anything jn the Cali- _
fornia Constitution M@alifornia statutes, of California
court decisions prior to the ones now being. appealed, ‘
‘that the California Supreme Court could point to.
’ In such total absence of reason or authority, this con-
clusion of the California Supreme Court should’ be .f
‘réjected as ‘‘unsubstantial and illusoty”’ (Lawrence
v. State Tax Comm., 286. U. . 27 6, 282-283. (4932) )..
E. The Water Delivery Provisions of on Contracts Do Not Re.
. serve to the United States the Right Arbitrarily to Discon- 3
tinue Water Delivery at the End of the Contract Term.
‘The majority of the California. Supreme Court - F
_ stated that: the. 9(e) contracts ‘would be contrary to.”
well-established. constitutional principles and” protec-_
tions”’ if they were construed’ as reserving ' to: the/
United States the discretion. arbitrarily to discontinue |
water service at the end of the contract term (47. Cal.
2d 643, 688, 713, 306 P.2d 851, 890, 884, AJS 56,.145,
221). Wi is our view that this, constitutional’ question ;
was not: really involved in these cases and should not
have been decided.
First, it should be noted that the Daliformia Court =
avoided a square holding that the contracts should be —
construed as reserving the right of arbitrary diseon-
| tinua ance of. water delivery. Thus, what the Court de-
-‘elared to be unconstitutional in this regard is a, pos-
sible interpretation’ of the contracts rather than the
contracts themsely es or the latv or which they are
based. Such a ‘possible interpretation is immaterial to .
'. the issues of these cases. It is a cardinal rule of com-
7 ae
‘traet interpretation that.if a contraet is capable of
- .two interpretations, one legal and one illegal, the in-
; terpretation ‘which makes it legal will be prefefred
(3 Williston, Contracts, § 620, pp. 1785-6 (Rev'd ed.
1936)). This rule is part of the statute law’of Cali--
fornia (Calif. Civ. Code §§ 1643, 3541). Having tacitly
conceded -that the contracts are subject to a construc-
tion which would aveid constitutional objections’ it
was improper for the California Supreme Court; even
obliquely to have questioned the validity of the con- |
tract on. this. ground. Of course this ambiv alent’ mode
: | of construction of the contracts may be disregarded |
. sinee it concerns the authority of the’ United States,
‘a federal question (S.R.A., Ine. ve Minnesota, 327
U.S; 558, 564 (1946)). It may be relevant, however, |
5 as showing a ‘‘nalpable-evasion’ ’ of state law in order
‘to avoid a federal rule .(cf. West Virginia v. Sims?
, 34. USS. 22, 33 (1951) (concurring opinion)).
Second, to the extent that. the contracts say any-
: thmg at - ssaipertions delivery, of water after thaiff
tive seit to continue eubie service. The Riadere ee
coritraet expressty’ recognizes that the District, has. a
right, under its 1939 coritract selling certain property. .
~~ to the United States for. the Central Valley Project. .
/ (47/Cal.2a 686, 306 P.2d 839, AJS 143), to contract -
- for permanent service from the
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