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Friant Water Authority v. Jewell

United States District Court, E.D. California

December 1, 2014

FRIANT WATER AUTHORITY, et al., Plaintiffs,
v.
SALLY JEWELL, as Secretary of the UNITED STATES DEPARTMENT OF THE INTERIOR, et al., Defendants, SAN JOAQUIN RIVER EXCHANGE CONTRACTORS WATER AUTHORITY, et al., Intervenors, SAN LUIS & DELTA-MENDOTA WATER AUTHORITY, et al., Defendant-Intervenors

For Friant Water Authority, a California joint powers authority, Plaintiff: Alexander M Porcaro, Ashley Evans Breakfield, James Alexander Reese, Paul P. Spaulding, III, LEAD ATTORNEYS, Thomas B Mayhew, Farella Braun and Martel LLP, San Francisco, CA; Jennifer Thompson Buckman, LEAD ATTORNEY, Friant Water Authority, Sacramento, CA.

For Lindsay-Strathmore Irrigation District, a California irrigation district, Madera Irrigation District, a California irrigation district, Arvin-Edison Water Storage District, a California Water Storage District, Shafter-Wasco Irrigation District, a California irrigation district, Plaintiffs: Jennifer Thompson Buckman, LEAD ATTORNEY, Friant Water Authority, Sacramento, CA.

For Orange Cove Irrigation District, a California irrigation district, Delano-Earlimart Irrigation District, a California irrigation district, Plaintiffs: Alex M. Peltzer, LEAD ATTORNEY, Peltzer & Richardson, LC, Visalia, CA.

For Stone Corral Irrigation District, a California irrigation district, Lower Tule River Irrigation District, a California irrigation district, Pixley Irrigation District, a California irrigation district, Porterville Irrigation District, a California irrigation district, Tea Pot Dome Water District, a California irrigation district, Tulare Irrigation District, a California irrigation district, Plaintiffs: Alex M. Peltzer, Kenneth J. Richardson, LEAD ATTORNEYS, Peltzer & Richardson, LC, Visalia, CA.

For Terra Bella Irrigation District, a California irrigation district, Saucelito Irrigation District, a California irrigation district, Kaweah Delta Water Conservation District, a water conservation district, Lindmore Irrigation District, a California irrigation district, Plaintiffs: Danial Zackary Smith, LEAD ATTORNEY, Law Office of Danial Zackary Smith, Visalia, CA; Lillian Christine Kirby, Ruddell Cochran Stanton Smith & Bixler, LLP, Visalia, CA.

For Sally Jewell, Secretary of the United States Department of Interior, United States Department of the Interior, Lowell Pimley, Acting Commissioner of the United States Bureau of Reclamation, David Murillo, Regional Director of the United States Bureau of Reclamation, Michael Jackson, Area Manager of the South-Central California Area Office of the United States Bureau of Reclamation, United States Bureau of Reclamation, United States of America, Defendants: Nicholas Jabbour, LEAD ATTORNEY, United States Department Of Justice, Civil Division, Washington, DC.

For San Luis & Delta-Mendota Water Authority, Westlands Water District, Intervenor Defendants: Daniel Joseph O'Hanlon, Elizabeth Louise Leeper, Rebecca Rose Akroyd, LEAD ATTORNEYS, Kronick Moskovitz Tiedemann & Girard, Sacramento, CA; Eileen M. Diepenbrock, Jonathan R. Marz, LEAD ATTORNEYS, Diepenbrock Elkin LLP, Sacramento, CA.

For Grassland Water District, a California irrigation district, Grassland Resource Conservation District, Intervenors: Ellen L Trescott, LEAD ATTORNEY, Adams Broadwell Joseph & Cardozo, Sacramento, CA; Hamilton Candee, LEAD ATTORNEY, Altshuler Berzon, San Francisco, CA.

For San Joaquin River Exchange Contractors Water Authority, Intervenor: Andrew John McClure, Paul Ryan Minasian, LEAD ATTORNEYS, Minasian Meith Soares Sexton & Cooper, LLP, Oroville, CA.

MEMORANDUM DECISION AND ORDER RE PLAINTIFFS' MOTION TO TRANSFER TO COURT OF FEDERAL CLAIMS (Doc. 71)

Lawrence J. O'Neill, UNITED STATES DISTRICT JUDGE.

I. INTRODUCTION

Plaintiff Friant Water Authority (" Friant"), a California joint powers authority that consists of twenty-one member water, water conservation, water storage and irrigation districts, as well as the City of Fresno, all located on the east side of the southern San Joaquin Valley, in Central California. Friant and its member agencies[1] (collectively, " Plaintiffs") bring this lawsuit against the United States Department of the Interior (" Interior"), Interior's member agency, the United States Bureau of Reclamation (" Reclamation" or " the Bureau"), as well as various federal officers[2] (collectively, " Federal Defendants"). See generally Doc. 64, Corrected First Amended Complaint (" FAC").

Friant's members contract with Reclamation for the delivery of water from the Friant Unit of the Central Valley Project (" CVP"). One of the principal features of the Friant Unit is Friant Dam, located in the foothills northeast of the City of Fresno, which impounds the waters of the upper San Joaquin River in Millerton Lake. The FAC challenges Federal Defendants' decision to release water from Millerton to satisfy the demands of downstream " Exchange Contractors." The Exchange Contractors hold priority " Exchange Contracts" with Reclamation, reflecting the fact that the Exchange Contractors held rights to the waters of the San Joaquin River that pre-date Reclamation's construction of the Friant Unit. See FAC ¶ 51.

Reclamation normally satisfies the demands of the Exchange Contractors by providing them with " substitute water" transported from Northern California through facilities in the Sacramento-San Joaquin Delta, thereby freeing up much of the water stored at Millerton for use by Friant's members. See id. at ¶ ¶ 7, 54. In the spring of 2014, however, Reclamation began releasing water from Millerton to satisfy the Exchange Contractors' demands. Id. at ¶ 8. According to Plaintiffs, Reclamation did so because it decided to allocate some of the water that normally would serve as " substitute water" to wildlife refuges, including those refuges administered by Grassland Resource Conservation District and Grassland Water District (" Grasslands"). See id. at ¶ 95. As a result, Reclamation allocated no water to Plaintiffs in 2014. Id. at ¶ 9. The FAC alleges generally that Reclamation's actions constitute a breach of the United States' contracts with Friant's member agencies, which contracts prohibit Reclamation from voluntarily declaring itself unable to supply the Exchange Contractors with substitute water. Id. at ¶ ¶ 99-107. The FAC also alleges that Federal Defendants' actions constituted a taking without just compensation in violation of the Fifth Amendment to the U.S. Constitution. Id. at ¶ ¶ 108-112. Court of Federal Claims. Doc. 71. Federal Defendants[3] San Luis & Delta Mendota Water Authority (" San Luis") [4] and Grasslands[5] filed oppositions. Docs. 89, 90 & 92. Plaintiffs replied. Doc. 95. The matter was taken under submission on the papers pursuant to Local Rule 230(g). Doc. 96.

II. BACKGROUND

A. The CVP.

In Westlands Water District v. United States, 337 F.3d 1092 ( Westlands VII )[6], the Ninth Circuit succinctly summarized the history of relevant aspects of the CVP:

A. Central Valley Project
The Central Valley Project (" CVP") is " the largest federal water management project in the United States." Central Delta Water Agency v. United States, 306 F.3d 938, 943 (9th Cir. 2002). " [L]ocated in the Central Valley Basin of California, which is roughly 400 miles long by 120 miles wide, [it] includes the major watersheds of the Sacramento and San Joaquin river systems." Id. These two river valleys merge at the Sacramento San Joaquin Delta, where the waters mix and then flow through the Carquinez Strait into the San Francisco Bay, continuing to the Pacific Ocean. Id.; United States v. Gerlach Live Stock Co., 339 U.S. 725, 728, 70 S.Ct. 955, 94 L.Ed. 1231, 116 Ct. Cl. 895 (1950). The Sacramento River has almost twice as much water as the San Joaquin River but the Sacramento Valley has very little tillable soil, while about " three-fifths of the [San Joaquin] valley lies in the domain of the less affluent San Joaquin." Gerlach Live Stock, 339 U.S. at 728; see also Dugan v. Rank, 372 U.S. 609, 612, 83 S.Ct. 999, 10 L.Ed.2d 15 (1963). To alter this imbalance and to make water available to the San Joaquin Valley, the state of California embarked on re-engineering its natural water distribution through the authorization of the Central Valley Project (" CVP"). [The] United States took over administration of this project in 1935. Gerlach Live Stock, 339 U.S. at 728.
The CVP's purpose is to " improv[e] navigation, regulat[e] the flow of the San Joaquin River and the Sacramento River, control[ ] floods, provid[e] for storage and for the delivery of the stored waters thereof, for the reclamation of arid and semiarid lands and lands of Indian reservations, and other beneficial uses, and for the generation and sale of electric energy." Act of August 26, 1937, Pub. L. No. 75 392, 50 Stat. 844, 850. To accomplish the project's purposes, CVP's construction includes a series of many dams, reservoirs, hydropower generating stations, canals, electrical transmission lines, and other infrastructure. Gerlach Live Stock, 339 U.S. at 733.
The [Bureau] operates the CVP. The California State Water Resources Control Board grants permits for water appropriation from the CVP. The Bureau appropriates water from various sources and delivers it to permit holders for beneficial uses. Central Delta Water, 306 F.3d at 943.

1. San Luis Unit of the CVP

The San Luis Unit, one of the many water management units of the CVP, was authorized by the San Luis Act of 1960. Pub. L. No. 86-488, 74 Stat. 156 (June 3, 1960). The San Luis Unit, an integral part of the CVP, consists of the San Luis Dam and the San Luis Reservoir. The San Luis Reservoir was constructed to provide water to Merced, Fresno and King Counties, and is used to store surplus water from the Sacramento-San Joaquin Delta, for delivery to contractors such as Westlands and San Benito. The Tracy Pumping Plant pumps water from the Sacramento-San Joaquin Delta into the Delta-Mendota Canal. The Delta-Mendota Canal, located south of the Sacramento-San Joaquin Delta, channels water along the west side of the San Joaquin Valley for use in the San Luis Unit and Reservoir. Westlands Water Dist. v. Patterson, 864 F.Supp. 1536, 1539 (E.D. Cal. 1994) ( Westlands III ).

2. Friant Unit of the CV

Around 1939, the Bureau took over construction of a dam on the San Joaquin River that eventually created Lake Millerton and the Friant Unit of the Central Valley Project. See Gerlach Live Stock Co., 339 U.S. at 728-29; Westlands III, 864 F.Supp. at 1539. The Friant Unit impounds the waters of the San Joaquin River at a dam constructed at Friant, California, approximately sixty miles upstream from Mendota, diverting a major portion of the flow of the San Joaquin River both to storage in Millerton Lake and into the Friant-Kern and Madera Canals for delivery to local water users. Dugan, 372 U.S. at 612-13. The CVP also diverts water from the Sacramento River into the San Joaquin Valley to make additional water available for use in the San Joaquin Valley.

B. Exchange ...


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