This case involved a dispute over water rights to California’s two largest rivers. An association of 16 water contracting agencies from north of the San Joaquin-Sacramento River Delta sought to establish superior water rights under water service contracts that would limit and exclude the export of water south of the Delta until its members received 100 percent of their contractually-allocated water supply. The plaintiff, Tehama-Colusa Canal Authority (TCCA) filed suit against the U.S. Department of the Interior and it’s Bureau of Reclamation, among others, asking the U.S. District Court for the Eastern District of California to provide injunctive and declaratory relief.

The water system involved in this dispute - the Central Valley Project (CVP) – is a federally-funded project established to pump water from the San Joaquin and Sacramento rivers into canals that carry it to the southern San Joaquin River Valley. In the 1930’s, California recognized the need to set-up a canal system to carry water into important farming regions, but couldn’t afford to fund the entire project. Thus, Congress passed federal legislation to authorize the creation of the Sacramento Valley Irrigation Canals, Central Valley Project. The federal legislation was intended to “supplement” California’s Central Valley Project Act- state legislation passed to protect water use within the area. The Congressional legislation specified that the CVP should be operated “in such a manner as will effectuate the fullest and most economic utilization of the land and water resources” of the area. In other words, Congress wanted to ensure that resources were allocated for “the widest public benefit.”  Presently, the CVP encompasses more than 20 reservoirs and 500 canals.

California’s “area of origin” statute (CWC §§11460-11465) was enacted to ensure adequate water supply for all users. However, the statute does not dictate how the Bureau of Reclamation allocates water. It only dictates the amount of water available to the Bureau for allocation. Normally, the Bureau allocates CVP water on a “pro rata” basis, except when there are “operational constraints” or contracts with agencies dictate priority of allocation. Thus, in dry years, all of the CVP users receive less water than they are contractually entitled to receive. In 2008 and 2009, the area experienced two dry-water years. In 2008, the plaintiffs received 100 percent of their allocation and users south of the Delta only received 50 percent. The next year, the governor declared a state of emergency and users north of the Delta received 40 percent of their allocation while the southern users received 10 percent.     

The plaintiff, through its member agencies, supplies water to agricultural, municipal and industrial water users. In their complaint, the plaintiff claimed that the Bureau of Reclamation reduced the water allocations of their water service contracts during times of water shortage, disregarding their “priority right” under state and federal law. The plaintiff further claimed that the Bureau improperly declared a water shortage while exporting water outside of the Sacramento River watershed. Additionally, the plaintiffs accused the defendants of arbitrarily allocating pro rata water allocations in disregard of priority rights and assumed the legal authority to allocate the water supply without complying with state and federal law.

So, the question, in this case, was the extent of authority and responsibility of the Bureau of Reclamation for allocating water and determining priority.  What action does the Bureau need to take to protect the prior rights of those in the CVP to “water reasonably required to adequately supply the beneficial needs of the watershed?” The governing statute does not address whether the Bureau is limited in their ability to divert water for export into areas south of the Delta and whether the Bureau has the discretion to provide certain CVP contractors with water at the expense of other contractors.  Thus, this became a dispute between users of water north of the Sacramento Valley, where water is plentiful, and users south of the Delta.