Opinion ID: 105730
Heading Depth: 1
Heading Rank: 3

Heading: action of the california courts.

Text: 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 with both state law and the Reclamation Act. Application of the excess land provision to an irrigator would, the court found, be unconstitutional. The Albonico litigation, No. 124, was an application for a mandatory order excluding lands in excess of 320 acres owned by the Albonicos from the Madera District. The court held that the excess land provisions were unconstitutional and that if applied to the Albonicos the mandatory order should issue. The trial court in the Santa Barbara confirmation case, No. 125, contrary to the action in the other cases, upheld the contract and granted confirmation. The court found that the Master Contract was ratified and confirmed by the Interior Department's Appropriation Act for 1951. 64 Stat. 595, 679. 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 members. The court appears to have reached this conclusion by finding that the contract created a debtor-creditor relationship and that the United States was acting as a public utility without conforming to state law.