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IVANHOE IRRIGATION DIST. V. MCCRACKEN, 357 U. S. 275 (1958) - US SUPREME COURT DECISIONS ON-LINE
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IVANHOE IRRIGATION DIST. V. MCCRACKEN, 357 U. S. 275 (1958)
Subscribe to Cases that cite 357 U. S. 275 U.S. Supreme CourtIvanhoe Irrigation Dist. v. McCracken, 357 U.S. 275 (1958)Ivanhoe Irrigation Dist. v. McCrackenNo. 122Argued April 29, 1958Decided June 23, 1958*357 U.S. 275ON APPEAL FROM THE SUPREME COURT OF CALIFORNIA
2. The judgments did not rest upon an adequate state ground, because state law was invoked only by the interpretation the Court gave to § 8 of the Reclamation Act of 1902. P. 357 U. S. 290. chanroblesvirtualawlibraryPage 357 U. S. 276
47 Cal.2d 597, 681, 695, 699, 306 P.2d 824, 886, 894, 875, reversed. chanroblesvirtualawlibraryPage 357 U. S. 277
These four cases present issues of basic importance to the federal reclamation laws. The Supreme Court of California has refused to confirm certain contracts entered into between two state irrigation districts and a water agency on the one hand, and the United States, on the other, [Footnote 1] finding the contracts invalid on several grounds. Ivanhoe Irrigation District v. All Parties and Persons, 47 Cal.2d 597, 306 P.2d 824; Santa Barbara County Water Agency v. All Persons and Parties, 47 Cal.2d 699, 306 P.2d 875; Madera Irrigation District v. All Persons, 47 Cal.2d 681, 306 P.2d 886; Albonico v. Madera Irrigation District, 47 Cal.2d 695, 306 P.2d 894. Specifically involved are parts of two statutory enactments: Section 5 of the Reclamation Act of 1902, [Footnote 2] providing chanroblesvirtualawlibraryPage 357 U. S. 278
generally that no right to the use of water shall be sold for lands in excess of 160 acres in single ownership, and § 9 of the Reclamation Project Act of 1939, [Footnote 3] providing, inter alia, for the repayment to the United States of funds expended on the construction of reclamation works, and authorizing the Secretary of the Interior to make contracts to furnish reclamation water at appropriate rates for irrigation. The opinion of the Supreme Court of California turned on an interpretation of a third provision, § 8 of the Reclamation Act of 1902. [Footnote 4] chanroblesvirtualawlibraryPage 357 U. S. 279
This litigation involves a dispute between landowners, on the one hand, and the combined State and Federal Governments, on the other. As the Attorney General of California points out, there is no clash here between the United States and the State of California. Quite to the contrary, the United States and the various state agencies, with commendable faith and steadfastness to one another, have embarked upon and nearly completed a most complicated joint venture known as the Central Valley Project. There have, at times, been differences, but these are inevitable in the everyday implementation of chanroblesvirtualawlibraryPage 357 U. S. 280
The saga of this project is fascinating. California has two somewhat parallel ranges of mountains running south from its northern border for two-thirds the length of the State. Known as the Sierra Nevada on the east and the Coast Range on the west, they converge on the north at Mount Shasta, and are joined by the Tehachapi Mountains on the south, thereby forming the Central Valley Basin. The basin extends almost 500 miles between these ranges, from Shasta to Bakersfield, and has an average width of 120 miles, including more than a third of the area of California. The main valley floor, comprising about a third of the basin area, is an alluvial plain some 400 miles long and averaging 45 miles in width. The Sacramento River, with headwaters near Mount Shasta, flows south into San Francisco Bay, draining the northern portion of the basin. The San Joaquin River, which rises above Friant in the south, runs first west, then north, to join the Sacramento River in the Sacramento-San Joaquin Delta, both finding a common outlet to the ocean chanroblesvirtualawlibraryPage 357 U. S. 281
through San Francisco Bay. See United States v. Gerlach Live Stock Co., 339 U. S. 725 (1950).
The completed project is built around these two great rivers, and includes a series of dams, three of which -- chanroblesvirtualawlibraryPage 357 U. S. 282
Shasta, Folsom, and Trinity River -- will furnish electric power. The state water plan contemplates that, eventually, 38 major reservoirs scattered at various points in this part of the State will store an estimated 30,000,000 acre-feet of water. The Shasta Dam and Reservoir sits at the head of the table on the north. With a capacity of 4,500,000 acre-feet of water, it, along with tributary dams and reservoirs, will control the floods from that area. The Trinity River, with headwaters west of Shasta on the western slope of the Coast Range, drains into the Pacific Ocean. A dam now under construction near Lewiston will impound some three-quarters of a million acre-feet of water which, by means of a tunnel, will be partially diverted into and supplement the waters of the Sacramento River lying to the east and across the mountains. The water supply facilities along the Sacramento River will regulate its flow, store surplus winter runoff for use in the Sacramento Valley, maintain navigation in the channel, protect the Sacramento-San Joaquin Delta from salt intrusion from the Pacific, provide a water supply for the Contra Costa and Delta-Mendota Canals, and generate a great deal of hydroelectric energy. The Contra Costa Canal services the south shore of Suisun Bay from Antioch to Martinez with water from the Delta for domestic, industrial, and irrigation use. The Delta-Mendota Canal transports surplus Sacramento River water to Mendota Pool on the San Joaquin River, 120 miles south of the Delta. The water is pumped from the Delta to the canal along the foothills of the Coast Range, and, by gravity, it runs to the pool at Mendota. This exchange of water replaces that diverted from the San Joaquin by the dam at Friant. This latter dam forces the entire flow of the San Joaquin into Millerton Lake, which has a capacity of 520,000 acre-feet of water. It is diverted from the lake by the Madera Canal to chanroblesvirtualawlibraryPage 357 U. S. 283
We hasten to correct any impression that lands in the Central Valley had not been reclaimed and irrigated at the inception of the project. On the contrary, since California entered the Union, it has worked diligently to bring water to its arid lands. Working largely through state irrigation districts, private interests have been ingenious in constructing smaller reservoirs, tapping underground sources, and attempting to prevent saline encroachment which would destroy the soil for agricultural purposes. Water has been called "the lifeblood of the State." Competition for this vital natural resource has provoked such chanroblesvirtualawlibraryPage 357 U. S. 284
controversy that it has required amendments to the Constitution and continual legislative activity. It is not at all surprising, therefore, that, in putting together the mosaic of Central Valley, some litigation would ensue. See United States v. Gerlach Live Stock Co., supra.
H.R.Doc. No. 587, 80th Cong., 2d Sess. 10. While the contract is authorized chanroblesvirtualawlibraryPage 357 U. S. 285
under § 9(c) of the 1939 Act, [Footnote 5] for our purposes, it is identical to the others, and will be discussed with them.
The contracts to which the Supreme Court of California took exception provide, in outline, that the United States will, after construction of the water supply facilities and the lateral distribution system for the irrigation districts, furnish water to the districts and the Santa Barbara County Agency for a period of 40 years. Incorporating the requirements of § 5 of the Reclamation Act of 1902, [Footnote 6] the contract provides that project water shall not be furnished to lands in excess of 160 acres in single ownership. This limitation applies only to "project water," and previously existing water supplies are unaffected thereby. "Large landowners," i.e., those who own excess land who wish that excess to have the benefit of project water, must agree to sell their excess to other than large landowners within 10 years at a price, fixed by three chanroblesvirtualawlibraryPage 357 U. S. 286
The provision is retroactive, and runs with the contract, and, when this amount is equal to the amount chanroblesvirtualawlibraryPage 357 U. S. 287
In the confirmation suits involving the Ivanhoe District, No. 122, and of the Madera District, No. 123, the trial court found the contracts and the proceedings leading to their execution invalid. The court reasoned that § 8 of the 1902 Act required that, "whenever there is a conflict between the Federal Reclamation laws and the laws of the State, the law of California must prevail." The court also found that, in the light of the origin of the Central Valley Project, the United States was trustee of an express trust of which the Ivanhoe District and others were among the beneficiaries. It concluded that all applications to appropriate water are included in such trust, and the beneficiaries have "an incomplete, incipient and conditional right in the water applied for" which is vested and runs with the land. The excess land provision was declared invalid and unenforceable as conflicting chanroblesvirtualawlibraryPage 357 U. S. 288
The Supreme Court of California, by a 4-3 vote, reversed the trial court judgment validating the contract in No. 125, the Santa Barbara case, and affirmed each of the other judgments. The principal opinion was in the Ivanhoe case, to which we confine our discussion. The majority agreed with the trial court that § 8 of the 1902 Act required the application of state law. It found that the excess lands provision was inapplicable and improper under state law, and that the contract was therefore invalid. This conclusion was posited on a trust theory of California water law, which placed a trust on the State and the irrigation districts for the benefit of water users. In administering this trust, the United States, the majority held, stood in the shoes of the State. The § 9(e) provisions of the contract were found invalid on the grounds that no provision was made for repayment of a stated amount within 40 years or for transfer of title to the distribution systems to the respective districts after payment thereof, and that no permanent right to receive water was vested in the respective districts and their chanroblesvirtualawlibraryPage 357 U. S. 289
Appellants claim that California's Supreme Court has held unconstitutional the federal statutes, § 5 of the Reclamation Act of 1902, as reenacted in § 46 of the Omnibus Adjustment Act of 1926, relating to the 160-acre limitation. It appears to us, however, that the opinion actually turned on the court's interpretation of § 8 of the 1902 Act. In effect, the court held that this section overrides all other sections of the Act, requiring that it be construed as not affecting state laws "relating to the control, appropriation, use, or distribution of water used in irrigation." Turning to state law, the court, by applying a "trust theory," held that the Federal Government could acquire no title to appropriative water rights free of a trust in the State of California for the benefit chanroblesvirtualawlibraryPage 357 U. S. 290
At the outset, we set aside as not necessary to decision here the question of title to or vested rights in unappropriated water. Cf. Nebraska v. Wyoming, 325 U. S. 589 (1945), chanroblesvirtualawlibraryPage 357 U. S. 291
325 U. S. 611-616. If the rights held by the United States are insufficient, then it must acquire those necessary to carry on the project, United States v. Gerlach Live Stock Co., supra, at 339 U. S. 739, paying just compensation therefor, either through condemnation or, if already taken, through action of the owners in the courts. As we see it, the authority to impose the conditions of the contracts here comes from the power of the Congress to condition the use of federal funds, works, and projects on compliance with reasonable requirements. And, again, if the enforcement of those conditions impairs any compensable property rights, then recourse for just compensation is open in the courts.
Section 5 is a specific and mandatory prerequisite laid down by the Congress as binding in the operation of reclamation projects, providing that "[n]o right to the use of water . . . shall be sold for a tract exceeding one hundred and sixty acres to any one landowner. . . ." chanroblesvirtualawlibraryPage 357 U. S. 292
Significantly, where a particular project has been exempted because of its peculiar circumstances, the Congress has always made such exemption by express enactment. See Act of September 3, 1954, 68 Stat. 1190, exempting the Santa Maria Project from the applicability of "excess land laws." [Footnote 8] With respect to the Central Valley Project, the Congress has again and again reaffirmed the specific requirements of § 5 and the action taken by chanroblesvirtualawlibraryPage 357 U. S. 293
In light of these congressional actions, it cannot be said that Congress intended that § 8 would, under the application of state law, make inapplicable the excess land provisions of § 5 of the Reclamation Act of 1902 to the Central Valley Project. That possibility is foreclosed by subsequent and continuing action by the Congress ever since the inception of the project. Such a record constitutes ratification of administrative construction, and confirmation and approval of the contracts. chanroblesvirtualawlibraryPage 357 U. S. 294
Fleming v. Mohawk Wrecking & Lumber Co., 331 U. S. 111, 331 U. S. 119 (1947); Brooks v. Dewar, 313 U. S. 354, 313 U. S. 361 (1941); Swayne & Hoyt Ltd. v. United States, 300 U. S. 297, 300 U. S. 302 (1937).
There can be no doubt of the Federal Government's general authority to establish and execute the Central Valley and Santa Barbara County projects. As we said in United States v. Gerlach Live Stock Co., supra, the Congress "elected to treat it (the Central Valley Project) as a reclamation project." 339 U.S. at 339 U. S. 739. We upheld its power to pursue the project as "clear" and "ample," an exercise of the general power "to promote the general welfare through large-scale projects for reclamation, irrigation, or other internal improvement." Id. at 339 U. S. 738. The Santa Barbara Project is supportable on the same grounds. Cf. United States v. Butler, 297 U. S. 1, 297 U. S. 65-67 (1936). In developing these projects, the United States is expending federal funds and acquiring federal property for a valid public and national purpose, the promotion of agriculture. This power flows not only from the General welfare Clause of Art. I, § 8 of the Constitution, but also from Art. IV, § 3, relating to the management and disposal of federal property. As this Court said in United States v. San Francisco, 310 U. S. 16, 310 U. S. 29-30 (1940), this "power over the public land thus entrusted chanroblesvirtualawlibraryPage 357 U. S. 295
to Congress is without limitations. . . . And it is not for the courts to say how that trust shall be administered. That is for Congress to determine." See also United States v. California, 332 U. S. 19 (1947), and Alabama v. Texas, 347 U. S. 272, 347 U. S. 273-274 (1954).
In considering appellees' specific constitutional contentions, it is well to recapitulate. The Central Valley Project is multi-purpose in nature. That portion of the project expense attributable to navigation, flood control, salinity prevention, recreation, and fish and wildlife preservation is nonreimbursable. The remainder of the total expense, and the only part that is reimbursable, is divided between two main sources. The first is hydroelectric power, which estimates indicate will be chargeable with over 50 percent of the reimbursable expense, plus interest on the part representing electric plants in service. The other is irrigation, which pays the rest without interest charge. In short, the project is a subsidy, the cost of which will never be recovered in full. Appellees argue that the same reasoning applies to power facilities, but chanroblesvirtualawlibraryPage 357 U. S. 296
there, the Government is operating the generating facilities itself, and the base rate upon which the power is sold includes an item for interest on the amount of expenditures allocated to that purpose. Hence, the true relationship of debtor-creditor is maintained. In the light of these facts, we believe that the language of the Court in Wickard v. Filburn, 317 U. S. 111, 317 U. S. 131 (1942), is apposite: "It is hardly lack of due process for the Government to regulate that which it subsidizes."
In any event, the provisions under attack are entirely reasonable, and do not deprive appellees of any rights to property or water. It is beyond dispute that excess land will be benefited by delivery of water to neighboring and nearby nonexcess land. This fact was recognized by the California Supreme Court in the Santa Barbara case. 47 Cal.2d 699, 712, 306 P.2d 875, 883. Furthermore, the Chief Engineer of the Madera District so testified before the Senate Committee on Public Lands in 1944. [Footnote 9] The contracts themselves indirectly refer to the benefits that may accrue, through underground water improvement, to excess owners, by provisions which declare that such water shall not be considered as furnished by the project. In other words, any benefits to the underground water level under excess acreage will not be chargeable to the owner of such acreage, but still will be available to his excess land. We therefore find no substance in the contention that "possible severance" of the excess acreage will result in damage constituting a taking of property chanroblesvirtualawlibraryPage 357 U. S. 297
We also find the other contract provisions reasonable and necessary. As we have pointed out heretofore the Act of July 2, 1956, supra, answered most of the objections lodged against these requirements. That Act requires the Secretary, in all § 9(d) and § 9(e) contracts executed after its passage, (1) to include a renewal provision, (2) to provide that, during the term of the contract or any renewal thereof, the contracting parties shall have "first right . . . to a stated share or quantity of the project's available water supply," and (3) to determine as soon as feasible the total repayment obligation of the contracting parties, crediting against that obligation so much of the amount paid for water supply as is unnecessary for operation and maintenance costs until, and only until, that obligation has been liquidated. The Secretary is authorized to negotiate amendments to existing contracts to incorporate the foregoing amendments. chanroblesvirtualawlibraryPage 357 U. S. 298
Second, objection was made to the absence of any provision to the effect that the districts would obtain title to the distribution systems when their obligations therefor had been totally discharged. We do not understand appellees to contend that the districts and landowners should ultimately obtain title to the principal dams and chanroblesvirtualawlibraryPage 357 U. S. 299
Any suggestion that the Congress might be arbitrary in the final accounting, or trample upon any of the rights of appellees, is highly improbable. It does not seem untoward for the recipients of a huge federal bounty to have to depend in small measure on the continued beneficence of their donor. It would be a physical impossibility to withdraw the facilities. As for the possibility of discrimination in the administration of those facilities, it seems farfetched to foresee the Federal Government "turning its back upon a people who had been benefited by it" and allowing their lands to revert to chanroblesvirtualawlibraryPage 357 U. S. 300
desert. [Footnote 10] The prospect is too improbable to figure in our decision.