Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-1_97-cv-06140/USCOURTS-caed-1_97-cv-06140-2/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 42:4332 Environmental Policy - Coop of Agency Reports

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UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

SAN LUIS & DELTA-MENDOTA WATER

AUTHORITY, et al.,

 Plaintiffs,

SAVE SAN FRANCISCO BAY ASSOCIATION,

et al.,

 Plaintiffs,

PIXLEY IRRIGATION DISTRICT, et al.,

 Plaintiffs-in-Intervention,

 v. 

UNITED STATES DEPARTMENT OF THE

INTERIOR, et al.,

 Defendant.

1:97-CV-6140 OWW DLB

1:98-CV-5261 0WW DLB

ORDER RE MOTION TO FILE A

SUPPLEMENTAL COMPLAINT

(DOC. 623)

I. INTRODUCTION

Plaintiffs San Luis & Delta Mendota Water Authority and

Westlands Water District joined by Plaintiff-in-intervention

Stockton East Water District (collectively the “water authority

plaintiffs”) move for leave to file a supplemental complaint

concerning Interior’s accounting of the 2004 water year. (Doc.

632, Motion; Doc. 634, Joinder.) The United States Department of

the Interior, et al., (the “federal defendants”) oppose. (Doc.

629.) Plaintiffs in the consolidated action, the Bay Institute

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In addition to the San Luis plaintiffs’ currently 1

operative second amended complaint, on December 1, 1999,

intervenor-plaintiff Stockton filed an amended complaint (Doc.

267), as did intervenor-plaintiff Pixley (Doc. 268). 

Environmental plaintiffs filed an amended complaint on December

6, 1999. (Doc. 271.)

2

of San Francisco, Environmental Defense, and Save San Francisco

Bay Association (collectively the “environmental plaintiffs”),

also oppose. (Doc. 630.) 

II. FACTUAL BACKGROUND

This case has a long and complicated history that is set

forth in great detail in several prior orders. For purposes of

this motion, a review of the pertinent holdings of the district

court and the Ninth Circuit, along with a summary of recent

events suffices. 

The water authority plaintiffs’ filed their currently

operative second amended complaint on April 5, 2001. (Doc. 395)1

The first cause of action alleged: 

26. Adoption of the Final Decision [on implementation

of Section 3406(b)(2)] by interior was in excess

of its statutory authority, or limitations on that

authority, because:

(a) The calculation of CVP yield attached to the

Final Decision is inconsistent with the

definition of CVP yield contained in CVPIA

section 3406(b)(2);

(b) The methodology established by the Final

Decision to account for the amount of yield

dedicated and managed annually pursuant to

CVPIA section 3406(b)(2) is inconsistent with

CVPIA section 3406(b)(2); 

//

//

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3

(c) Implementation of the potential fishery

actions described in the Final Decision, when

combined with other measures implemented

under Section 3406(b)(2), will result in the

dedication and management of CVP yield in

excess of the 800,000 acre-feet maximum limit

resulting in impacts to CVP contractors

beyond those authorized by law;

(d) The Final Decision does not count against the

800,000 acre-feet maximum limit any water in

excess of 450,000 acre-feet that is used to

meet the requirements of the 1995 Delta Water

Quality Control Plan (WQCP), unless the U.S.

Fish & Wildlife Service makes a written

finding of biological necessity.

(e) The Final Decision allows Interior to decide

each year whether water that is used for

purposes of complying with the requirements

of the Endangered Species Act will be counted

toward the 800,000 acre-feet maximum limit. 

(Doc. 395 at ¶24-28.) The remaining claims for relief alleged: 

Interior’s (b)(2) accounting for the October 1, 1999 - September

2000 Water Year was unlawful (Id. at ¶¶29-32, Second Claim for

Relief); Interior unlawfully failed to consider how its

implementation of 3406 (b)(2) would have affected delivery of CVP

water during the 1928-1934 period (Id. at ¶¶33-35, Third Claim

for Relief); Interior’s implementation of Section 3406(b)(2)

creates unreasonable uncertainty for CVP water users (Id. at 36-

40, Fourth Claim for Relief); Interior’s practice of prioritizing

environmental purposes over agricultural, municipal, and

industrial purposes violates Section 3402's requirement that

Interior “achieve a reasonable balance among competing demands”

(Id. ¶¶41-45, Fifth Claim for Relief); Interior’s conclusion that

the proposed fishery restoration actions adopted in the Final

Decision would benefit fish, wildlife, and habitat were

unsubstantiated (Id. at 46-50, Sixth Claim for Relief). 

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In May 2001, the parties filed cross-motions for summary

judgment on most, but not all, of the claims raised in the

complaint. Among other arguments, the water district plaintiffs

moved for judgment that “The Final Decision is not in accordance

with law because Interior does not count all water used to meet

the requirements of the 1995 WQCP and other legal obligations

imposed after enactment against the 800,000 acre-foot limit...” 

(hereinafter referred to as the “failure to account” claim).

On October 19, 2001, the district court issued an order on

the cross motions for summary judgment. With respect to the

failure to account claim, the district court ruled that Interior

had “discretion to annually determine how much CVP yield to

devote to WQCP or post-CVPIA ESA requirements” but had no

discretion “whether or not to count CVP yield used for such

(b)(2) purposes” (i.e., all such uses must be counted):

Section 3406(b)(2) unambiguously directs Interior to

“dedicate and manage annually eight hundred thousand

acre-feet of Central Valley Project yield for the

primary purpose of implementing the fish, wildlife, and

habitat restoration purposes and measures authorized by

this title.” Interior has no discretion whether to

annually provide more or less than 800 TAF of CVP yield

(approximately 5.99 MAF) for (b)(2) purposes, unless it

makes certain findings under CVPIA § 3406(b)(2)(C)...

Interior is also directed to annually dedicate and

manage the mandatory 800 TAF of CVP yield “to assist

the State of California in its efforts to protect the

waters of the San Francisco Bay/Sacramento-San Joaquin

Delta Estuary [i.e., the WQCP]; and to help to meet

such obligations as may be legally imposed upon the

[CVP] under State or Federal law following the date of

enactment of this title, including but not limited to

additional obligations under the Federal Endangered

Species Act.” Id. at 4715-16. As a matter of law,

this language is not ambiguous -- water used to meet

WQCP or post-CVPIA ESA requirements is an additional

(b)(2) purpose and must be charged against the 800 TAF

(b)(2) mandate if so used.

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The CVPIA is not silent on what amount of water used

for these so-called “secondary” purposes is to be

credited against the 800 TAF (b)(2) mandate. (E.g.,

could all 800 TAF of (b)(2) water be used to meet postCVPIA-enactment ESA requirements?). Congress mandates

that exactly 800 TAF of CVP yield (. 5.99 MAF) be

dedicated for (b)(2) purposes, whether “primary” or

“secondary.” To hold otherwise would render the 800

TAF figure superfluous. This leaves to Interior, the

discretion to annually determine how much CVP yield to

devote to WQCP or post-CVPIA ESA requirements. 

However, if it were left to Interior’s “discretion” 

whether or not to count CVP yield used for such (b)(2)

purposes, the annual 800 TAF cap would be illusory. 

The 800,000 TAF is intended by Congress as an immutable

floor and ceiling on annual reallocation of water from

CVP yield for (b)(2) purposes. If Interior uses more

than 800 TAF for (b)(2) purposes in any year, but does

not count all CVP yield used for such purposes, it

violates CVPIA § 3406(b)(2). Water-districts’ motion

for summary judgment on whether Interior has the

discretion to limit credits against (b)(2) for water

used for WQCP or post-CVPIA ESA purposes to 450 TAF is

GRANTED, Interior has no such discretion. Any amount

of CVP yield water annually used for a (b)(2) purpose

must be counted as part of the 800 TAF. The

environmental plaintiffs’ motion for summary judgment

on this issue is denied. 

(Doc. 466 at 32-33 (emphasis added)(internal citations and

footnotes omitted)). A partial judgment was entered under Fed.

R. Civ. P. 54 and certified for interlocutory appeal to the Ninth

Circuit.

The water authority plaintiffs, environmental plaintiffs,

and federal defendants cross-appealed aspects of the district

court’s partial judgment to the Court of Appeals. The federal

defendants later abandoned their appeal. 

The Ninth Circuit issued a decision on June 3, 2003 and an

amended decision on January 23, 2004. Bay Inst. of San Francisco

v. United States, 66 Fed. Appx. 734, 735 (9th Cir. 2003); Bay

Inst. of San Francisco v. United States, 66 Fed. Appx. 734, 735

(9th Cir. 2003), affirming the district court decision in all but

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one respect. On the failure to account issue, the Ninth Circuit

held:

The district court erred in concluding that Interior

lacks discretion to refrain from crediting the amount

of Project yield actually used for any (b)(2) purpose

against the designated 800,000 acre feet of Project

yield. To hold otherwise would defeat the primary

purpose for which the 800,000 acre feet were

designated-fish, wildlife, and habitat restoration. 

Section 3406(b)(2) provides that the “primary purpose”

to which the 800,000 acre feet should be dedicated is

the implementation of “fish, wildlife, and habitat

restoration purposes authorized by this title....”

Section 3406(b)(2) also provides that the 800,000 acre

feet may be used to “help” meet obligations under the

Endangered Species Act and to “assist” in meeting water

quality standards. If Interior were required to deduct

some or all the water it uses for water quality and

Endangered Species Act purposes from the (b)(2)

dedication, the water needed for implementation of the

Improvement Act's restoration mandate could be

relegated to a secondary role, or perhaps no role at

all. Such a scenario would directly conflict with the

Interior’s mandate to give effect to the hierarchy of

purposes established in Section 3406(b)(2).

Bay Inst., 87 Fed. Appx. at 637. The appeal is now final as no

petition for certiorari was filed by any party. The balance of

Plaintiffs’ claims were held in abeyance pending the appeal and

are technically still before the district court.

In their proposed supplemental complaint, Plaintiffs contend

that Interior’s accounting for (b)(2) water during the period for

October 1, 2003 through September 30, 2004 (the “2004 (b)(2)

Accounting Year”) fails to comply with the statute as interpreted

by the district court and the Ninth Circuit. Specifically,

Plaintiffs contend that the quantity dedicated for (b)(2)

purposes during the 2004(b)(2) Accounting Year exceeded 800,000

acre-feet because interior excluded from its accounting 159,200

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 The water authority plaintiffs attach to the proposed 2

supplemental complaint a spreadsheet that purportedly records

interior’s accounting for the 2004 (b)(2) Accounting Year. This

spreadsheet indicates that 159,200 acre-feet went to “non-(b)(2)

Fishery Actions.”

7

acre feet used in “non-(b)(2) Fishery Actions.” This 159,200 2

acre-feet figure apparently consisted of 150,000 acre-feet in

reduced CVP export pumping from the Sacramento-San Joaquin Delta

for the purpose of benefitting fish, as well as 9,200 acre-feet

in releases to the American and Stanislaus Rivers to meet BayDelta Water Quality Control Plan requirements. 

III. DISCUSSION

A. Applicable Legal Standards.

The filing of amended and supplemental pleadings is governed

by Federal Rule of Civil Procedure 15(d), which provides:

Upon motion of a party the court may, upon reasonable

notice and upon such terms as are just, permit the

party to serve a supplemental pleading setting forth

transactions or occurrences or events which have

happened since the date of the pleading sought to be

supplemented. Permission may be granted even though the

original pleading is defective in its statement of a

claim for relief or defense. If the court deems it

advisable that the adverse party plead to the

supplemental pleading, it shall so order, specifying

the time therefor.

The Ninth Circuit has entrusted application of this rule to the

district court’s broad discretion. 

Rule 15(d) is intended to give district courts broad

discretion in allowing supplemental pleadings. The rule

is a tool of judicial economy and convenience. Its use

is therefore favored. As Judge Haynsworth observed more

than two decades ago: 

Rule 15(d) of the Federal Rules of Civil Procedure

provides for...supplemental pleading. It is a

useful device, enabling a court to award complete

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relief, or more nearly complete relief, in one

action, and to avoid the cost, delay and waste of

separate actions which must be separately tried

and prosecuted. So useful they are and of such

service in the efficient administration of justice

that they ought to be allowed as of course, unless

some particular reason for disallowing them

appears, though the court has the unquestioned

right to impose terms upon their allowance when

fairness appears to require them.

....The clear weight of authority, however, in both the

cases and the commentary, permits the bringing of new

claims in a supplemental complaint to promote the

economical and speedy disposition of the

controversy....

Keith v. Volpe, 858 F.2d 467, 473 (9th Cir 1988)(internal

citations omitted). 

Leave should be “freely given,” “[i]n the absence of any

apparent or declared reason - such as undue delay, bad faith or

dilatory motive on the part of the movant, repeated failure to

cure deficiencies by amendments previously allowed, undue

prejudice to the opposing party by virtue of allowance of the

amendment, futility of amendment, etc.” Foman v. Davis, 371 U.S.

178, 182 (1962) (emphasis added). 

However, supplementation may not be used “to introduce a

separate, distinct and new cause of action.” Planned Parenthood

of S. Ariz. v. Neely, 130 F.3d 400, 402-03 (9th Cir. 1997). In

Neely, the Ninth Circuit found supplementation was inappropriate,

after considering the relatedness of the initial and supplemental

complaints, whether final judgment had been rendered, and whether

the district court retained jurisdiction over the case:

The supplemental complaint filed by plaintiffs involved

a new and distinct action that should have been the

subject of a separate suit. Although both the original

suit and the supplemental complaint sought to challenge

Arizona's parental consent law, the supplemental

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complaint challenged a different statute than the one

that had been successfully challenged in the original

suit. Additionally, a final judgment had been rendered

in the original action four years prior to plaintiffs'

request to supplement their complaint. That judgment

was not appealed and in no way would be affected by

plaintiffs' supplemental complaint. Nor did the

district court retain jurisdiction after entering that

order.

130 F.3d at 402 (emphasis added). The Neely court also

considered whether the filing of a supplemental complaint would

serve the interests of judicial economy:

To determine if efficiency might be achieved, courts

assess "whether the entire controversy between the

parties could be settled in one action....” In the case

at hand there would necessarily be two actions since

the original suit had been settled for some time. 

There were also no "technical obstacles" to plaintiffs

bringing a new, separate action to challenge [the

statute] as amended.

Id. at 402-03 (internal citations omitted). 

Neely specifically distinguished a number of prior cases,

including Keith, recognizing the nature of affirmative

obligations previously imposed upon the defendant by those courts

and that the proposed supplemental complaints in those cases

alleged that the defendant violated a prior court order: 

In both Keith and [two other cases] the courts retained

jurisdiction over later developments despite rendering

final judgments. In [these] cases, the courts, as part

of their final orders, required the parties to comply

with broad, aspirational directives. Finally, in each

of the cases, the actions of the defendants which the

plaintiffs sought to challenge through supplemental

pleading were alleged to be specific attempts by the

defendants to contravene the courts' earlier rulings.

These factors are not present in the case at hand. The

district court did not retain jurisdiction nor did it

enter an order guiding the parties' future affirmative

duties. Further, plaintiffs did not aver that the

defendants were defying the court's []decision

enjoining them from enforcing the original parental

consent statute.

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The federal defendants also cite Wagner v. Professional 3

Engineers in California Government, 354 F.3d 1036 (9th Cir. 2004)

as an example of a case in which amendment was denied. But

Wagner is distinguishable. The plaintiffs in Wagner initially

represented in a joint status report to the district court that

neither party anticipated amending the pleadings. The trial

court issued a scheduling order, which provided that “[n]o

further joinder of parties or amendments to pleadings is

permitted except with leave of Court, good cause having been

shown.” Id. at 1051 (emphasis added). Six months later, the

Wagner plaintiffs moved to amend the complaint to incorporate

allegations concerning two subsequent events. The motion was

denied on the ground that plaintiffs failed “to focus on the Rule

16 good cause standard in their amendment motion.” Id. Despite

this ruling, the Wagner plaintiffs argued that the scope of the

original allegations was broad enough to effectively include

liability for the subsequent events. The district court rejected

this argument and the Ninth Circuit affirmed on the ground that

plaintiffs were unsuccessful in their attempt to gain leave to

supplement the complaint under Rule 15. Id. The federal

defendants have failed to demonstrate why Wagner would control

the outcome of the instant motions. Critically, here, the water

authorities are under no obligation to show “good cause” for

their amendment. 

10

Id. at 403.3

Under Keith, Foman, and Neely, the following factors were

applied in deciding whether the complaint should be supplemented:

(1) The relatedness of the original and supplemental

complaints;

(2) Whether allowing supplementation would serve the

interests of judicial economy; 

(3) Whether there is evidence of delay, bad faith or

dilatory motive on the part of the movant, or evidence

of repeated failure to cure deficiencies by amendments

previously allowed; 

(4) Whether amendment would impose undue prejudice upon the

opposing party;

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(5) Whether amendment would be futile;

(6) Whether final judgment had been rendered; 

(7) Whether the district court retains jurisdiction over

the case; 

(8) Whether any prior court orders imposed a future

affirmative duty upon defendant; and 

(9) Whether the proposed supplemental complaint alleges

that defendants defied a prior court order.

B. Application of the Keith/Foman/Neely Factors.

1. The relationship between the original and

supplemental complaints.

The water authority plaintiffs suggest that the claims set

forth in the proposed supplemental complaint are mere extensions

of the claims of their currently operative second amended

complaint (SAC). (Doc. 395.) The SAC sets forth seven causes of

action, the first of which is the most relevant here:

26. Adoption of the Final Decision [on implementation

of Section 3406(b)(2)] by interior was in excess

of its statutory authority, or limitations on that

authority, because:

(a) The calculation of CVP yield attached to the

Final Decision is inconsistent with the

definition of CVP yield contained in CVPIA

section 3406(b)(2);

(b) The methodology established by the Final

Decision to account for the amount of yield

dedicated and managed annually pursuant to

CVPIA section 3406(b)(2) is inconsistent with

CVPIA section 3406(b)(2); 

(c) Implementation of the potential fishery

actions described in the Final Decision, when

combined with other measures implemented

under Section 3406(b)(2), will result in the

dedication and management of CVP yield in

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excess of the 800,000 acre-feet maximum limit

resulting in impacts to CVP contractors

beyond those authorized by law;

(d) The Final Decision does not count against the

800,000 acre-feet maximum limit any water in

excess of 450,000 acre-feet that is used to

meet the requirements of the 1995 Delta Water

Quality Control Plan (WQCP), unless the U.S.

Fish & Wildlife Service makes a written

finding of biological necessity.

(e) The Final Decision allows Interior to decide

each year whether water that is used for

purposes of complying with the requirements

of the Endangered Species Act will be counted

toward the 800,000 acre-feet maximum limit. 

(Doc. 395 at ¶26.) 

The proposed supplemental complaint is an as-applied

challenge to Interior’s implementation of (b)(2) accounting in

light of the district court and Ninth Circuit’s subsequent

rulings on the failure to account and incorrect accounting

claims. It directly challenges Interior’s accounting for the

2004 Water Year, alleging that Interior specifically omitted from

its annual (b)(2) accounting 150,000 acre-feet in reduced CVP

export pumping from the Sacramento-San Joaquin Rivers Delta “for

the purposes of benefitting fish” and 9,200 acre-feet in releases

to the American and Stanislaus Rivers to meet 1995 Bay-Delta

Water Quality Control Plan Requirements. The proposed

supplemental complaint alleges that as a result, Interior

dedicated 959,000 acre-feet of CVP water for (b)(2) purposes,

159,000 acre-feet more than the 800,000 acre-feet limit of

section 3406(b)(2). The proposed complaint also impliedly

challenges two management documents issued by Interior: (1) the

“Department of the Interior Decision on Implementation of Section

3406(b)(2) of the Central Valley Improvement Act,” issued May 9,

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2003; and (2) the “Guidance for the Implementation of Section

3406(b)(2),” issued December 17, 2003, which supplements the May

9 document in light of the Ninth Circuit’s subsequent rulings. 

In the context of this entire litigation, the proposed

supplemental complaint tests the effect and measuring of the

Ninth Circuit’s holding on (b)(2) accounting:

The district court erred in concluding that Interior

lacks discretion to refrain from crediting the amount

of Project yield actually used for any (b)(2) purpose

against the designated 800,000 acre feet of Project

yield. To hold otherwise would defeat the primary

purpose for which the 800,000 acre feet were

designated-fish, wildlife, and habitat restoration. 

Section 3406(b)(2) provides that the “primary purpose”

to which the 800,000 acre feet should be dedicated is

the implementation of “fish, wildlife, and habitat

restoration purposes authorized by this title....”

Section 3406(b)(2) also provides that the 800,000 acre

feet may be used to “help” meet obligations under the

Endangered Species Act and to “assist” in meeting water

quality standards. If Interior were required to deduct

some or all the water it uses for water quality and

Endangered Species Act purposes from the (b)(2)

dedication, the water needed for implementation of the

Improvement Act's restoration mandate could be

relegated to a secondary role, or perhaps no role at

all. Such a scenario would directly conflict with the

Interior’s mandate to give effect to the hierarchy of

purposes established in Section 3406(b)(2). 

Bay Inst., 87 Fed. Appx. at 637. Put another way, the water

authorities’ proposed supplemental complaint asks, among other

things: Does Interior have the discretion to elect not to deduct

water used for implementation of the CVPIA’s restoration mandate

from the designated 800,000 acre-feet? This and several related

questions arguably raised by the proposed supplemental complaint

are closely and directly related to the issues decided in earlier

stages of this litigation. (The issues are so closely related

that, if the initiation of a new case were required, the new case

would likely be a related case to this case).

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The federal defendants emphasize the “fact that the October

1999 Final Decision [challenged in the initial complaint] is now

superceded entirely by the May 2003 Decision.” (Doc. 629, Fed.

Deft’s Opp’n, at 5.) This is of little moment. Federal Rule of

Civil Procedure 15(d) is “designed to permit expansion of the

scope of existing litigation to include events that occur after

the filing of the original complaint.” Keith, 354 F.2d at 471. 

The federal defendants point to no authority that suggests

amendment should be denied on such a ground.

2. Judicial Economy.

The district court has developed extensive knowledge of the

relevant law, background, and scientific considerations governing

the complex water accounting and CVPIA technical CVP operational

requirements. Retaining the new claims as part of the existing

case serves the interests of judicial economy.

Although no party disputes the practical advantages of

allowing the proposed claim to proceed in this court, the federal

defendants suggest that it is more appropriate to follow the

Ninth Circuit’s holding in Neely. In that case, the Ninth

Circuit found that the interests of judicial economy would not be

served by amendment, reasoning that:

To determine if efficiency might be achieved, courts

assess “whether the entire controversy between the

parties could be settled in one action...” 6A Charles

Alan Wright, Arthur R. Miller & Mary Kay Kane, Federal

Practice and Procedure: Civil 2D § 1506 (1990). In the

case at hand there would necessarily be two actions

since the original suit had been settled for some time. 

There were also no “technical obstacles” to plaintiffs

bringing a new, separate action to challenge § 36-2152

as amended. See United States v. Reiten, 313 F.2d 673,

675 (9th Cir. 1963) (stating that, “the general purpose

of the Rules [regarding amended and supplemental

complaints is] to minimize technical obstacles to a

determination of the controversy on its merits”).

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Id. at 402-03. The federal defendants assert that, as in Neely,

there are no “technical obstacles” here to the filing of a

separate case. But the federal defendants cite Neely out of

context. There, the original complaint challenged a particular

statute as unconstitutional. The district court entered a final

order declaring the statute unconstitutional and no party

appealed. Id. at 401-02. Several years later, the State of

Arizona amended and reenacted the statute in question and the

original plaintiffs filed a motion with the district court to

file a supplemental complaint. Id. at 402. The Ninth Circuit

ruled that it was an abuse of discretion for the district court

to permit the filing of a supplemental complaint, because “while

leave to permit supplemental pleading is favored, it cannot be

used to introduce a separate, distinct and new cause of action.” 

Id. Here, unlike in Neely, there need not “necessarily be two

actions.” This case, which concerns the interpretation of the

same statute, 3406(b)(2), is still pending, there is no final

judgment that decides all claims of the complaint. The water

authority plaintiffs now challenge subsequent administrative

interpretations and implementation of the same statutory

provision in a later water year. Supplementation for such a

purpose has already been permitted in this case, when Plaintiffs

challenged Interior’s first revision of its (b)(2) Final Policy.

3. Evidence of delay, bad faith, dilatory motive, or

repeated failure to cure.

No party argues that the proposed supplemental complaint has

been lodged in bad faith or for any dilatory motive, nor has

there been a repeated failure to cure. The federal defendants do

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The federal defendants frame the issue as follows: “If, 4

as the Authority avers, it will challenge the propriety of the

Bureau’s accounting practices for the 2004 Water Year in one

forum or another, the question for the court is whether it makes

sense to prolong the present case beyond its eight-year life

span.” (Doc. 629-1 at 7.) But, this is not exactly the point. 

If it serves the interests of judicial economy to allow these

claims to be brought in the present lawsuit, this would weigh in

favor of expanding the eight year life-span of this suit. 

16

argue, however that the water authority plaintiffs have delayed

unreasonably the filing of their motion to supplement. 

The 2004 (b)(2) Accounting Year ended on September 30, 2004,

and the Bureau’s final accounting for that water year became

available on December 1, 2004. The water authority plaintiffs

filed no formal protest or motion to supplement the complaint

until October 4, 2005, nearly a year later. The federal

defendants further point out that there has been no substantive

activity in this case for nearly three years. What the federal

defendants have failed to establish is that this delay is

unreasonable, prejudicial, or that it would warrant denial of the

present motion to supplement. The amended decision in the Court 4

of Appeals was not issued until January 23, 2004. “[D]elay in

and of itself is not sufficient reason to deny a motion to

supplement the complaint...” Bromley v. Michigan Educ.

Association-NEA, 178 F.R.D. 148, 154 (E.D. Mich. 1998). 

4. Prejudice to the opposing parties.

The federal defendants do not suggest that they would be

prejudiced by the filing of the supplemental complaint. The

environmental plaintiffs, however, insist that prejudice will

result:

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[I]n the event that the motion is granted,

environmental plaintiffs in these consolidated

proceedings would become parties to disputes raised by

the supplemental complaint, despite not being sued and

not, at this stage of the administrative proceedings,

having challenged the Interior’s implementation of the

CVPIA as to the 2004 Water Year. Leave would thus

prejudice the rights of the environmental plaintiffs,

who have a very real and important interest in bringing

their action against Interior to its successful and

final conclusion. The Districts should not be

permitted to disturb that concluding process by filing

the proposed supplemental complaint.

(Doc. 630 at 5-6.) The water authority plaintiffs do not respond

directly to this contention. 

As to the environmental Plaintiffs, these concerns are

valid. As of the date of filing of the motion to supplement, the

claims raised by the environmental plaintiff’ have been

concluded, except for a decision on their claimed EAJA legal

fees. The proposed supplemental complaint has been submitted. 

If the environmental plaintiffs do not have an interest in the

issues presented, a severance can be granted, removing them from

this phase of the case if that is their wish. 

5. Futility of amendment.

The federal defendants suggest that leave to file the

proposed supplemental complaint should be denied because it fails

to state a claim upon which relief may be granted. (Doc. 629 at

3-4.) The relevant inquiry is whether amendment would be legally

futile. A complaint may be deemed futile if it would fail to

state a claim under Federal Rule of Civil Procedure, Rule

12(b)(6). Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th

Cir. 1988).

The federal defendants are correct that the proposed

supplemental complaint sets forth allegations regarding the 2004

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(b)(2) Water Year in a section entitled “general allegations,”

rather than under a particular cause of action. In fact, the

proposed complaint does not formally state any “cause of action.” 

But, it does assert that Interior’s accounting for 2004 is

“arbitrary and capricious, an abuse of discretion, and not in

accordance with law, within the meaning of 5 U.S.C. § 706(2)(A),

and is in excess of statutory jurisdiction, authority, or

limitations, or short of statutory right, within the meaning of 5

U.S.C. section 706(2)(C).” (Doc. 623-1 at ¶10.) This language

arguably states a claim under the Administrative Procedure Act

sufficient to satisfy the liberal requirements of Federal Rule of

Civil Procedure 8. 

The environmental plaintiffs raise a more substantive

challenge to the supplemental complaint, arguing that “the

excluded 159,000 acre-feet of CVP water were non-discretionary

fish actions taken in 2004 to comply with the Water Quality

Control Plan and the Endangered Species Act.” (Doc. 630 at 4.) 

The environmental plaintiffs maintain that the exclusion of this

water from the accounting “was necessary to ensure the higher

priority of the restoration efforts, consistent with the Ninth

Circuit mandate.” (Id.)

The Ninth Circuit’s opinion facially authorizes Interior to

refrain from counting water used for secondary (b)(2) purposes:

The district court erred in concluding that Interior

lacks discretion to refrain from crediting the amount

of Project yield actually used for any (b)(2) purpose

against the designated 800,000 acre feet of Project

yield. To hold otherwise would defeat the primary

purpose for which the 800,000 acre feet were

designated-fish, wildlife, and habitat restoration. 

Section 3406(b)(2) provides that the “primary purpose”

to which the 800,000 acre feet should be dedicated is

the implementation of “fish, wildlife, and habitat

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restoration purposes authorized by this title....” 

Section 3406(b)(2) also provides that the 800,000 acre

feet may be used to “help” meet obligations under the

Endangered Species Act and to “assist” in meeting water

quality standards. If Interior were required to deduct

some or all the water it uses for water quality and

Endangered Species Act purposes from the (b)(2)

dedication, the water needed for implementation of the

Improvement Act’s restoration mandate could be

relegated to a secondary role, or perhaps no role at

all. Such a scenario would directly conflict with the

Interior’s mandate to give effect to the hierarchy of

purposes established in Section 3406(b)(2). 

Bay Inst., 87 Fed. Appx. 637. But, the Ninth Curcuit’s ruling

arguably does not address the discrete question the water

authority plaintiffs raise in the proposed supplemental

complaint: Whether Interior can classify a fish restoration

action (arguably a “primary” use) as a “secondary” use simply

because it was a “mandatory” action taken to ensure compliance

with the Water Quality Control Plan and/or the Endangered Species

Act, which allegedly emasculates the 800,000 AF maximum limit on

dedication of CVP yield to (b)(2) purposes. The water authority

plaintiffs contend that “Nothing in the Ninth Circuit’s opinion

excuses Interior from counting water used for the ‘primary’ fish

and wildlife restoration purpose.” (Doc. 632, Reply, at 4.) 

This is a question not considered and left unanswered by the

Ninth Circuit’s decision. Put another way, if Interior is free

to use all CVP yield for purposes it characterizes as

“secondary,” the 800,000 AF limit means nothing and there is no

effective annual ceiling on CVP yield use for (b)(2) purposes.

6. Whether the district court retains jurisdiction

over the case/ Whether final judgment had been

rendered.

Both the federal defendants and the environmental plaintiffs

assert that this case is effectively over and point out that the

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 In a related argument, the federal defendants assert that 5

the May 9, 2003 (b)(2) accounting policy moots all claims based

upon the October 1999 (b)(2) policy. This argument has been

rejected. See Part B.1 at 12-13.

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only recent activity has been litigation concerning attorneys

fees. The water authority plaintiffs respond that, in fact, a 5

number of claims remain outstanding:

The Partial Final Judgment resolved some of the claims

in this action. It resolved “the environmental

plaintiffs’ second claim; San Luis and Delta-Mendota

Authority’s first, second and third claims; Pixley

Irrigation District’s first and second claims; and

Stockton East Water District’s first and second

claims.” Partial Final Judgment On Accounting Issues,

2:12-15, (Docket # 491). Other claims remain. In

their action, the Environmental Plaintiffs allege five

claims. In this action, the Authority alleges six

claims, Pixley four, and Stockton East five. (Docket

## 395, 268, 267.) Accordingly, even if the

Authority’s motion for leave to file a supplemental

complaint were denied, this action would not be over. 

The remaining claims would still not be resolved. The

Federal Defendants’ argument that this case will be

over if only the Court denies this motion to file a

supplemental complaint is mistaken.

(Doc. 632 at 2-3 (emphasis added).) But, no party has made any

attempt to bring these dormant claims to resolution. During oral

argument on the motion to supplement, the parties were given 30

days, until April 24, 2006, to either dismiss existing dormant

claims or assert new claims, as necessary. Assuming that the

parties will dismiss the dormant claims, this is the only factor

that weighs in favor of denying the motion to supplement. 

In sum, the proposed supplemental complaint is a discrete

and logical extension of the original claims in this case. In

addition, allowing supplementation serves the interest of

judicial economy, as consuming administrative and judicial

resources of the court in not having to open a new case, randomly

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assigning it, going through the related-case low number analysis,

and initiating Rule 16 scheduling as if this were a new case, do

not serve judicial economy. The federal defendants and

environmental plaintiffs have failed to establish that any delay

that has occurred is prejudicial. No other incurable prejudice

has been demonstrated. The filing of the proposed supplemental

complaint is not futile, as it raises at least one valid and

discrete legal challenge to Interior’s (b)(2) accounting

practices and (b)(2) implementation in the 2004 water year.

IV. CONCLUSION

For the reasons set forth above, the water authority

plaintiffs’ motion to supplement is GRANTED.

Notwithstanding contrary deadlines set at the hearing on the

motion to supplement, the parties shall have until May 27, 2006

to either dismiss existing dormant claims or assert new claims. 

Any responsive pleadings shall be filed by June 15, 2006. A

hearing on any motions to dismiss the supplemental complaint

shall be held on July 17, 2006, at 10:00 a.m. in Courtroom 3.

DATED: May 17, 2006.

/s/ OLIVER W. WANGER

_____________________________

OLIVER W. WANGER

United States District Judge

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