Court Opinion

ID: 9007082
Source: CourtListenerOpinion
Date Created: 2022-11-27 13:39:15.815683+00
Date Added: 2024-06-11T17:11:19.247597
License: Public Domain

CYNTHIA HOLCOMB HALL, Circuit Judge,
concurring:
I concur in parts I and III of the majority’s opinion. As to the issues raised in part II, I concur in the result, but on the ground very ably set forth by the district court: The Appellants’ right to purchase water from the government is subject to subsequent legislation affecting the exercise of that right.
“ ‘[Sovereign power, even when unexer-cised, is an enduring presence that governs all contracts subject to the sovereign’s jurisdiction, and will remain intact unless surrendered in unmistakable terms.’ Therefore, contractual arrangements, including those to which a sovereign itself is party, ‘remain subject to subsequent legislation’ by the sovereign.” Bowen v. Public Agencies Opposed to Social Security Entrapment, 477 U.S. 41, 52, 106 S.Ct. 2390, 2397, 91 L.Ed.2d 35 (1986) (quoting Merrion v. Jicarilla Apache Tribe, 455 U.S. 130, 148, 147, 102 S.Ct. 894, 907, 71 L.Ed.2d 21 (1982)). “[CJontracts should be construed, if possible, to avoid foreclosing exercise of sovereign authority.” Id. 477 U.S. at 52-53, 106 S.Ct. at 2397.
Appellants’ asserted property right in the rates set in the 1951 Contract ultimately rests on the argument that by virtue of the 1939 and 1951 Contracts, Congress has surrendered its right to exercise its sovereign power to legislate and the executive’s obligation to act in conformance with legislation. Examination of Appellants’ contracts fails to disclose the requisite unequivocal surrender of sovereignty. See Peterson v. United States Dep't of Interior, 899 F.2d 799, 808 (9th Cir.), cert. denied, 498 U.S. 1003, 111 S.Ct. 567, 112 *1407L.Ed.2d 574 (1990). Rather, the language of the contracts appears to reserve Congress’ right to exercise its sovereign power. Both provide that they are executed pursuant to the 1902 Federal Reclamation Act and all acts amendatory or supplementary thereto. 1939 Contract at 1; 1951 Contract at 1. The 1939 Contract explicitly recognizes that the Appellants’ right to purchase water is subject to both congressional action and implementation by regulation. 1939 Contract at 12, 14.
Appellants point to language in the 1951 Contract providing that the Secretary may set the water rates annually “but in no event shall the rates so announced be in excess” of $3.50 and $1.50 per acre-foot for Class One and Class Two water, respectively. 1951 Contract at 13 (emphasis added). This language is insufficient to unmistakably surrender Congress’ right to legislate. It is doubtful that the Secretary of the Interior could, by contract, waive the right of Congress to pass laws; but in any case, it does not appear that such a waiver was even contemplated. As stated above, the contracts were made pursuant to the Reclamation Act and statutes amending or supplementing the Act by their own terms. Furthermore, the initial contract recognized that the United States would unilaterally determine the price Appellants would pay for water. 1939 Contract at 12-13. Assuming for the moment that the reference to water rates in the 1951 Contract is even applicable to the imposition of operation and maintenance costs, in this context, the words “in no event” may be interpreted to mean “in no event under the current legislative regime” or “in no event unless Congress legislates otherwise” would the Secretary adjust cost-sharing arrangements.
The Reclamation Act itself required that Appellants pay an appropriate share of operation and maintenance costs. See 43 U.S.C. § 485h(e) (1988). Congress amended the Act to require a cost sharing adjustment. See Water Resource and Small Reclamation Projects Act, Pub.L. No. 99-546, § 106, 100 Stat. 3050, 3052 (1986). Appellants argument that the rates fixed in a contract made pursuant to statute preclude the government from collecting operation and maintenance costs as clearly compelled by statute cannot prevail.
Similarly, to the extent the charges result in a total water cost to Appellants that exceeds the final cost of water to other users, the contracts allow such a result when brought about by reclamation legislation. This conclusion is further supported by other contractual provisions indicating that the parties intended the district to bear its own operation and maintenance costs for the distribution network extending from the canal. See 1951 Contract at 25-27. Thus, the district must have contemplated that its bottom-line water cost would differ in some respects from the absolute water cost of other users of Fri-ant Dam water. The contract must be interpreted to require only that the rate per acre-foot of water is the same to each irrigation water user. Even if the contracts did not explicitly acknowledge that they were subordinate to statute, the doctrine of reserved sovereign power would compel the same conclusion. The language of the contracts does not unequivocally surrender congressional power to charge the district for the actual cost of operating and maintaining the Madera Canal.
Accordingly, the district court’s order should be affirmed.