UNITED STATES COURT OF APPEALS 

FOR THE TENTH CIRCUIT 

 

PEOPLE’S ELECTRIC 

COOPERATIVE, an Oklahoma rural 

electric cooperative corporation, 

 Plaintiff - Appellant, 

v. 

WESTERN FARMERS ELECTRIC 

COOPERATIVE, an Oklahoma rural 

electric cooperative corporation, 

 Defendant - Appellee. 

No. 14-6193 

(D.C. No. 5:12-CV-01314-HE) 

(W.D. Okla.)

 

ORDER AND JUDGMENT*

 

Before BRISCOE, Chief Judge, LUCERO and MATHESON, Circuit Judges. 

 

 People’s Electric Cooperative (“PEC”) appeals the district court’s grant of 

summary judgment to Western Farmers Electric Cooperative (“WFEC”). PEC seeks 

to reclaim a hydropower allocation it transferred to WFEC in 1977. Exercising 

jurisdiction under 28 U.S.C. § 1291, we affirm. 

 

 *After examining the briefs and appellate record, this panel has determined 

unanimously that oral argument would not materially assist the determination of this 

appeal. See Fed. R. App. P. 34(a)(2); 10th Cir. R. 34.1(G). The case is therefore 

ordered submitted without oral argument. This order and judgment is not binding 

precedent, except under the doctrines of law of the case, res judicata, and collateral 

estoppel. It may be cited, however, for its persuasive value consistent with 

Fed. R. App. P. 32.1 and 10th Cir. R. 32.1. 

FILED 

United States Court of Appeals 

Tenth Circuit 

June 19, 2015

Elisabeth A. Shumaker 

Clerk of Court

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I 

 PEC is an Oklahoma rural electric distribution cooperative that supplies retail 

power to its customers. WFEC is an Oklahoma rural electric generation and 

transmission cooperative that supplies wholesale power to its members. The 

Southwest Power Administration (“Southwest”) is an agency of the U.S. Department 

of Energy that markets hydropower to rural electric cooperatives. 

 PEC began purchasing power from Southwest in 1951. In the late 1960s, 

Southwest determined that it was unable to provide its customers with their full 

hydropower needs, and informed PEC that it would no longer do so when its contract 

expired in 1977. Consequently, PEC sought other sources of power. It joined 

WFEC, which agreed to provide PEC’s full power needs. PEC agreed to allow 

WFEC to negotiate with Southwest for delivery of hydropower on its behalf. In so 

doing, PEC relinquished to WFEC its hydropower allocation from Southwest. WFEC 

and Southwest entered into a Power Sales Contract in 1977 under which WFEC 

would deliver hydropower to PEC for a 20-year term. The parties later extended the 

contract through 2012. That year, they executed a new contract. All relevant 

provisions, rights and obligations from the 1977 contract remain unchanged. 

 PEC terminated its membership in WFEC on March 26, 2013. When WFEC 

refused to return to PEC its historic hydropower allocation, PEC sued, arguing that it 

is a third-party beneficiary of the 1977 Power Sales Contract. PEC seeks to receive 

its historic hydropower allocation as a benefit it claims was intended under the 

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contract. The district court granted summary judgment in favor of WFEC. PEC 

timely appealed. 

II 

A

 Unlike the district court, we conclude that Oklahoma law, not federal common 

law, governs this dispute. “[T]he involvement of an area of uniquely federal interest 

establishes a necessary, not a sufficient, condition for the displacement of state law 

[by federal common law].” Empire Healthchoice Assurance, Inc. v. McVeigh, 

547 U.S. 677, 692 (2006) (ellipsis and quotations omitted). Following the Supreme 

Court’s decision in Erie R.R. Co. v. Tompkins, 304 U.S. 64 (1938), the instances in 

which federal common law applies are “few and restricted.” Wheeldin v. Wheeler, 

373 U.S. 647, 651 (1963). “[A]bsent some congressional authorization to formulate 

substantive rules of decision, federal common law exists only in such narrow areas as 

those concerned with the rights and obligations of the United States, interstate and 

international disputes implicating conflicting rights of States or our relations with 

foreign nations, and admiralty cases.” Texas Indus., Inc. v. Radcliff Materials, Inc., 

451 U.S. 630, 641 (1981). Accordingly, we have held: 

[W]hen the federal government has an articulable interest in the 

outcome of a dispute, federal law governs. Thus, if diverse resolutions 

of a controversy would frustrate the operations of a federal program, 

conflict with a specific national policy, or have some direct effect on the 

United States or its treasury, then federal law applies. 

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Howard v. Grp. Hosp. Serv., 739 F.2d 1508, 1510-11 (10th Cir. 1984) (citations and 

footnote omitted). 

 In the case at bar, although Southwest is a federal agency, it is not a party to 

the suit, and the litigation therefore “does not touch the rights and duties of the 

United States.” Bank of Am. Nat’l Trust & Sav. Ass’n v. Parnell, 352 U.S. 29, 33 

(1956). Regardless of which party prevails in this dispute, Southwest will continue 

to provide hydropower to a rural electric cooperative. The only question is whether it 

will supply the power to PEC or to WFEC. There is no indication that the resolution 

of the case in favor of either party will frustrate the operations of a federal program 

or conflict with a national policy. Accordingly, we hold that Oklahoma law governs 

the dispute. See Anderson v. Eby, 998 F.2d 858, 864 (10th Cir. 1993) (holding that 

state law controlled third-party beneficiary claim based on a contract with the federal 

government when resolution of the contract dispute did not frustrate a national policy 

or any federal operations). 

B

 We review a district court’s grant of summary judgment de novo, viewing the 

evidence and drawing reasonable inferences in the light most favorable to the nonmoving party. Seifert v. Unified Gov’t of Wyandotte Cnty./Kan. City, Kan., 779 

F.3d 1141, 1150 (10th Cir. 2015). “The court shall grant summary judgment if the 

movant shows that there is no genuine dispute as to any material fact and the movant 

is entitled to judgment as a matter of law.” Fed. R. Civ. P. 56(a). 

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 Under Oklahoma law, “the paramount objective of contract interpretation is to 

effectuate the intent of the parties as expressed by the terms of the contract.” Walker 

v. Builddirect.com Techs. Inc., No. 112,075, 2015 WL 2074964, at *2 (Okla. May 5, 

2015) (to be published in P.3d). Unambiguous, clear, and consistent terms will be 

enforced to carry out the expressed intention of the parties. Phillips v. Estate of 

Greenfield, 859 P.2d 1101, 1104 (Okla. 1993). A non-party to a contract “may avail 

himself of its benefits . . . if it appears the parties intended to recognize him as a 

beneficiary.” Keel v. Titan Constr. Corp., 639 P.2d 1228, 1231 (Okla. 1981). To 

enforce a contract as a third-party beneficiary, the “contract must be made for the 

express benefit of [the] third-party.” Roye Realty & Developing, Inc. v. Watson, 2 

P.3d 320, 329 (Okla. 1996). Third parties who benefit only incidentally from a 

contract cannot enforce it. Lynn v. Rainey, 400 P.2d 805, 814 (Okla. 1964). A party 

is an incidental beneficiary if a contract was not expressly made for its benefit. See 

Copeland v. Admiral Pest Control Co., 933 P.2d 937, 939 (Okla. Civ. App. 1996). 

 PEC argues that it is a third-party beneficiary of the 1977 Power Sales 

Contract based on the emphasized language in two provisions of the contract: 

WHEREAS, in establishing the total quantity of peaking power and 

energy to be purchased by [WFEC] from [Southwest], the parties hereto 

have included the quantities of such power and energy which 

[Southwest] would otherwise make available for purchase by seven 

[WFEC] member cooperatives [including PEC] in Oklahoma which 

previously purchased firm power service from [Southwest] under 

contracts which expired on June 30, 1977, and to which, by contract 

with each such member cooperative, [WFEC] is obligated to furnish and 

deliver, or cause to be furnished and delivered, the power and energy 

required to fulfill their system load requirements[.] 

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It is further recognized that the “Eastern Member Cooperatives” 

[including PEC] are and have been purchasing firm power service from 

[Southwest] which was and is delivered, for the account of [Southwest], 

from the systems of Oklahoma Gas and Electric Company and Public 

Service Company of Oklahoma . . . under contracts the effective terms 

of which expired on June 30, 1977, and that such firm power service has 

been continued at the request of the “Eastern Member Cooperatives” on 

a month-to-month basis, but to a date not later than November 30, 1977. 

It is also recognized that in allocating the quantity of “Hydro Peaking 

Power” and associated energy to be purchased by [WFEC] under Article 

II, hereof, [Southwest] included quantities of power and energy which 

[Southwest] had allocated and would otherwise make available for 

purchase by the “Eastern Member Cooperatives.”1

According to PEC, the emphasized language means that WFEC would receive 

PEC’s power allocation only so long as WFEC continued to deliver power to PEC, 

and reflects that the parties intended for PEC to reclaim its hydropower allocation if 

it stopped receiving power from WFEC. 

But the language on which PEC relies does not provide for the return of 

hydropower allocations upon expiration of the contract. The contract does not state 

what will happen if PEC stops receiving power from WFEC. Thus, the parties did 

not express an unambiguous intent for the hydropower allocation to be returned to 

PEC. Cf. Phillips, 859 P.2d at 1104. Instead, the 1977 Contract states that PEC’s 

contract with Southwest expired on June 30, 1977 and was to continue to no later 

than November 30, 1977, suggesting that the parties did not intend to return the 

power allocation to PEC. This language hardly constitutes a clearly expressed intent 

 1

 PEC does not claim that Article II of the contract supports its third-party 

beneficiary claim. 

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to benefit PEC. Cf. Keel, 639 P.2d at 1231. Rather, recognition that WFEC is 

obligated to furnish PEC with its full power needs, and that Southwest formerly 

furnished PEC with power, makes PEC an incidental beneficiary of the contract. Cf. 

Copeland, 933 P.2d at 939. The purpose of the contract is not to benefit PEC. It is to 

establish the terms under which WFEC is to purchase power from Southwest, some 

of which was formerly allocated to PEC. 

 Accordingly, we conclude that the terms of the 1977 Power Sales Contract are 

not ambiguous, and that WFEC is entitled to summary judgment. See Ahlschlager v. 

Lawton Sch. Dist., Indep. Sch. Dist. 008 of Comanche Cnty., 242 P.3d 509, 515 

(Okla. 2010) (“The construction of an unambiguous contract is a matter of law for the 

court.”). We thus need not consider extrinsic evidence to ascertain the intent of the 

parties. See id. The unambiguous terms do not demonstrate that the contract was 

made for the express benefit of PEC, as required for third-party beneficiary status. 

PEC thus may not maintain an action to enforce the contract. See Lynn, 400 P.2d at 

814. This conclusion obviates our need to consider WFEC’s alternate grounds for 

affirmance. 

III 

 The judgment of the district court is AFFIRMED. 

 Entered for the Court 

 Carlos F. Lucero 

 Circuit Judge 

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