# Appellants Opening Brief — Ivanhoe Irrigation Dist. v. McCracken > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386409_0077%3A05 ## Record - **Collection:** Supreme Court brief - **Document type:** Appellants Opening Brief - **Published:** January 1, 1958 - **Citation:** 357 U.S. 275 ## Text See [ Oca Sa nn 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 . 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% 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 @- , 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 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: ‘§485h(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 ~— 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 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* 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 project by’ negotiat- ing’ suecessive term contraets for water delivery within six months after the termination of the present _ contract and each succeeding contract’ (Madera con- tract, Article 4, R. 192-193). Arti¢le 10 of the Santa * option, extend, or ‘renew | e a | Barbara contract contains. the | rotting - previso Ret . $82):. Pi TOU ided,. That in, the eyynt the Congress of the United. States Aluring the .téim: of thee nd - tPac enacts ‘legislation. | permittjng. the. renewal : éxtdision of this contracts the: Agene vo may, ‘at - this. contract, in. eonform-* ance with and subject ‘to the ternis of ‘the. then: ‘exist: ing law”. The sLyanliod contr act alone is simply silent on thie sibject. eo Sere de Sacer Ya eee At the time ‘these contrad $s were eI tered’ “thie, S06- “tion, a 2), the statute wh eh ainthqrized them: and limited their term to 40. years, ° . we aw - o xy ‘ _¢« ¢ . . aia ra Finally, since eiatins nt of re Net ‘of July 2 2, Act. (52). oo ea | ote : ‘ « €ITe nee, We'see that the contacts are valid for what ” they are-—instruments establishing the. terms’ and con- .ditrons of w ater delivery for a stated 40-year period. The ‘y do net preseribe what will happeg after the 46- - year period ends because. that ‘subject is not. within the ‘scope, of their coverage. In-any event, federal, law. has been “au snended since “these contracts were entered | “into tepafford statutory assurance: of éontinued water service gipon: terms, and conditions nmiutually satisfac. ytory- te the federal sovernment and the contrasting g district. Asa result, possible constitutional objections : to the right-of the u liited States® to. discontinue water: , delivery against. ‘tlie will of the water users. are aca- demic and irrelevant. - Sb aS RS i oe . y 9 ty pe of irrigation: ; + 2 - - “a 9(d) or Ge). eontract: has, a fir we ‘right (40. which ze 4 the rights of. holde rs of any ‘ther water, con Mgt are subordinate) ; to -a stated share or. quantity of - the ‘ available. project water. supply | ~ (§ 1(4)). The Secretary’ of the Interior ‘is expressly . *s ’ “ae ey Y. ‘THE PROVISION OF THE CONTRACTS RESPECTING - : aie ‘TITLE TO WORKS Is VALID. ae gee - “Phe Iv anhoe and Madera contracts, each contain: - the followi ng provision: reserving title to all preject works’ in the C nited States until ‘otherwi Ase provided ~ by Congress | (Ty anhoe. paged Art. 33, Rs 6; Madera contr act: Art. 27 212): “Title te all of the herd ‘works, hah the | _ distribution, system | constructed -by’ the United ” States’ pursuant to this contract, shall be and fe- - Main in the name of the.United States until other-_ _wise Provided for by the: Congress, notwithe@kand- ing the transfer heredfter of any of such: works | to. the District for operation and maintenance.”’ et é Ses a on Fak a * ° Ther é is no such provision in ‘the Santa B Barbara contre cts; master or member unit, which are contracts: for. water “service only. “The provision, however, does appear in the Goleta, ‘Summeriand, and Carpenteria distribution. system, contracts | which: have been vali-. dated. by final judemients: not appealed, — Sa ye “Tie majority of the ‘California Supreme Court: has ‘held that this provision. of the sontracts is. inyalid as | BR meer of federal. Jaw on tHe basis o! of the, following reasoning: 1. Under federal “ste the: patationship betwéeh the contracting district t.and-tiie U nited States is one of © ‘‘debtor_and creditor” ’ (47 Cal. 2d §31, 639- 640, 648, 306 P. 2d SH, 849, S54, ATS 39, 52, 63). = a One of the incidents of this ‘debtor-creditor rela- dnship is that apon repayment. ‘the distriet. would & . r 2 © en ft . e . e . Pe ee tp ee ee . a cies — 64. . : . ar5e.- « o. . ie - +. ow succeed. to whatevar- title, to lands, structures or works. acquired by the United States within the district in: aid of its activities on behalf of the distriat. anid “the landowners within. the district, in ihe manner and. to the same -extent as an or dinary debtor is entitled to satisf action of record evidencing the payment of his. indebtedness” (a Cal.2d 631, 306 P.2d 844, Ad S 39). “3. Conv ersely, “thie. right” and obligation ‘of the - United States would seem to be ‘to hold the property thus acquired by: it in its,own name only until final re- pay inent is made, avith the right of the district to: a gonvey ance: thereof not dppendent on a. future and” *s necessarily ‘discretionary act of Congr ess”? (47 Ca al.2d ; - | Gal; 306 P.2d 844, ASS. 39-40)... 28 ees 4. ‘Bisse the iawn quoted = eae pro- vides for retention ‘of title by the United States until Congress provides otherwise, ‘toby iously such a pro- Vision -In the ‘agreement ‘is contrary to the .debtor- r creditor relationship existing between the United _ States and the. distrigt?” sf Cal. 2d. om, 306° P 2d é Ot Att). iia ae eee - age key determination in the foregoing Ting’ of re rea-_ soning. is that one of the incidents of the ““debtor- cr reditor”” relationship established by federal lawsis . the right of the debtor, the contracting district, to a conveyance’ of, title to tlie facilities serving it-after it has paid its shgre of the construction costs. However, the California Supreme Court majority-failed to eite any federal statute, regulation, or court, decision wherew this is provided. The reason is that there'is none. The - wee’ e e “% VU oe e only. statute of which we are aware that does mention the subject of title to project. works: (section 6 of the -Reolamation’ Act of 1902 (32 -Stat. 389, 43 U.S.C. ° § 498) ), supports rather than ‘contradicts -the provi- --sion in the contracts that Congre ossional action is Te- ares quired to transfer. title. As stated by: Chief Justice -Gibson of the California Supremé Court, dissenting i in Tvanhoe. ( 47. Cal.2d .662,> 306 P,2d 864, ATS. 85-86) : '. “There is no reason why the parties eannot “agree that title to the project works shall’ remain in. the* nited States after repayment of con- " struction -costs. The provision,..is. a reasonable method: of assuring that the various ‘properties of the project shall remain devoted ‘to the pur- - poses for which the federal funds were expended, * and, in the, absence of a showing that the provi-: Sn violates ‘the Lonstitution, or a statute - or some rule of policy, we ‘should -not hold ‘it to be “invalid. Theye is nothing i the .contract. or in the reclamation law Which _precludes~ Congress from transferring title to préject property to. the. district. after all ‘terms of the: contract are per- formed, and it will be up to the. district to press | . gation works to tha) water users, bills have been in- a are, in “ . its claim thereto: at such a time.”’ , La : In recognition of the fact that federal law dees not now authorize the transfer of title. to federal irri-. % trodueeg-in the last to sessions.of Congress to permit transfers under certain conditions. : a In thé 84th Congres. 8 2217 was aes by the Senate’ on July 2, 1956, but was nat acted upon by the House of Representatives prior: to. the - termination: . ° ‘ Ie y * - « of that Congress. In its f avotable repirt: ‘on the bill, . the Senate Cémmittee on Interior and Insular Affairs. : explained it as :follows*(S. Rep. No. 2379; 84th. Cong., ee - 2d Sess.’ 2 (1956)) : eS al er A - $2217 proposes to authorize the. See retaxy of : the Interior+o-transfer. t title ‘to distribution sys-. tems of Federal reclamation pr ojects under cer- tain circumstances to loeal water users’ or ganiza- tions upon two conditions: (a) that an organiza- tion representing the water users concerned shall « have requested the transfer: and (b) that the Sec- * retary shall find that the water users or the organ- .. ization have completed repayment of all construe- . tion and- other charges, with the exception of op- - eration and maintegance charges not yet due, which are obligations With respect to the distribu- tion system concerned, Under existing Re clama- tion law, na provision is made for the transfer of "title to distribution works ‘upon completion of re- “payment from the U nited States to any organiza : 4 ation. i eye ; “Where two or mr fnore water-user oF ‘ganizations are coneerned with ‘a distribution’ system - the transfer may be effected by the Secretary on the’ = joint application of the organizations: affected. “The bill avoids any ref€rence to the transfer of dams or other supply. w orks as: distinguished” ~ from irrigation distribution systems, The reason’ _ for this omission is that the question of transfe om of danis or headworks involves c6nsiderafions of national@policy, as well as ‘interstate ‘considera- tions ard should be taken up. In connection with . . matters of broad. national policy affecting water. resources and their. use.’ (Emphasis added). | 6 Ce . Inf the fir ut session. of the 85th, Congress 0 on. May 16. . 1957, an identical bill, Ss. 413, was again passed by the - Senate. It is now pending before the House of Repre- ——€ong: :, Ist Sess. 2 (1957 )). rete sentatives for consideration during the second session. . A similar expl anation of this bill was given by the | - Senate Committee on Interior and Insular Affairs in its. favorable report thereon (S. Rep. No. 291, 85th | Thus itis clear that while there m may be persuasive reasons for transferring title of irrigation, w orks from the federal government to the water. users when they hive completed payment: of their construction obli- gation, transfer is a poligy matter demanding Con- gressional action. Although Congréss is now.consider- ing a change ‘iw present. law, that change has not yet.. . been made. The challenged provision of the contracts ds, hence, merely a restatement of what’ federal law - requires i in. any qrent.. 7 . a ay. t \ pense CONCLUSION. oe a For the reasons stated it is respeetfully submitted that the judgments of the Supreme Court of Cali-* fornia should be reversed. Dated: February. 26, 1958. Respectfully submitted, Epmunp G. Brown, . Attorney Genexal of the State of C Dalifpenia, B-ABB0Tt GOLDBERG, | re 8 ¢ Deputy Attorney General of the State of California, ADOLPH us Moskovirz, Deputy. Attorney General of the State of California, oa! ea Aitorneys for Appellants, Phe State | of California and The Iv anhoe Irvi.. : gation District. Dav 1 E. anp Denver C: ‘Prckinran, °. . Attorneys for. Appellant, The Madera | a Frrigation District. Vern B. THOMAS, . . District Attorney of the County of Santa Barbara, vhs State of Califoriit,: : FRANcIs- Price, A orneyS- Jor Appellant, The Sar Santa Barbara Counts y Water Agency. eas . ’ . +) ae (Appendices Follow, | --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40386409_0077%3A05. Public record. Not legal advice.