Did Bureau improperly disregard contractual water allocations?

The Federal District Court for the Eastern District of California first addressed the plaintiff’s assertion that the Bureau disregarded the water allocations specified under the agencies’ water service contracts. Originally, the TCCA members executed CVP water service contracts in the 1960’s and 1970’s. The contracts were set to expire in 1995. Prior to that time, plaintiffs received less than 100 percent of contract amounts during five water shortage years (1977, 1990, 1991, 1992, and 1994). In 1992, Congress stepped in and enacted the Central Valley Project Improvement Act (CVPIA) which “reallocated” the use priorities for CVP water. After enactment of the CVPIA, the CVP began negotiating new water contracts with its users.

During negotiations, the Bureau continued to assert their responsibility for allocation of CVP water and consistently rejected requests by TCCA members to preclude water reduction unless and until reductions were made south of the Delta. Ultimately, the plaintiffs accepted long-term renewal contracts in 2005 with priority allocation terms. The current TCCA contracts contain a “shortage provision” allowing the Bureau to determine shortages and reduce allocations in times of shortage.

Despite the plaintiff’s arguments to the contrary, the federal court held that federal and state law (CVP statutes and CWC §11460) did not contain provisions supporting the priority allocation right the TCCA claimed. According to the court, the purpose of the CVP was to provide the “widest possible public benefit.”  The statutes expressly and plainly provided that Congress and the State of California did not intend to provide preference to users north of the Delta. The project was intended to provide water to the entire CVP, not just those areas where the water originated. Because the statutes were clear, there was no need for the court to examine the legislative history behind the statutes.  The court cited a 1955 California Attorney General Opinion explaining the state’s position. The opinion specified that “no inhabitant of a watershed of origin becomes possessed of any presently vested title or right to any specific quantity of water…”.

Bureau’s interpretation of Reclamation Law

The court next addressed the plaintiff’s argument that the Bureau improperly interpreted Reclamation Law by declaring water shortages. According to the court, the Bureau consistently stated its position of authority to allocate water in the CVP. This is evidenced by the Bureau’s repeated rejection that an “area of origin” provision be included in the plaintiff’s contracts. The Bureau never agreed to provide 100 percent contractual water supply and even included shortage provisions in each contract. Federal Reclamation Law specifically directs that Bureau not to agree to priority allocations. The Bureau is tasked with providing allocations which ensure the “widest public benefit.” Since the Bureau is a party to the contract, federal law governs the interpretation of the TCCA contracts. The plain language “within the four corners” of the 2005 TCCA contracts clearly indicates that the parties did not intent priority allocations and the Bureau was perfectly within its rights to declare a water shortage and take subsequent action. Under the long-term contracts, a “condition of shortage” may occur “because of errors in physical operations of the Project, drought or other physical causes beyond the control of the contracting officer…”.

Since the inception of the CVP, the Bureau has never recognized a legal obligation to observe “area of origin” water rights. According to the court, “fatal to the plaintiff’s interpretation of its CVP contracts is the total absence of any language granting an area of origin preference. In order for the CVP to happen, California had to accept help from the federal government. Along with that came federal guidelines and laws that trumped state law. Tehama-Colusa Canal Authority v. U.S. Dept. of the Interior, et al, No. 1:10-cv-0712 OWW DLB, 2011 U.S. Dist. LEXIS 83497 (E.D. Cal. Jul. 29, 2011).

For original article, see: Long-standing Dispute over California Water Rights Rages On: Court Determines “Widest Public Benefit?”