Grant County Black Sands Irrigation Dist. v. U.S.

• Decision Date: 02 September 2009
• Docket Number: No. 2008-1354.,2008-1354.
• Citation: 579 F.3d 1345
• Parties: GRANT COUNTY BLACK SANDS IRRIGATION DISTRICT (GCBSID) and Williamson Land Company, Plaintiffs-Appellants, v. UNITED STATES BUREAU OF RECLAMATION, Ken Salazar, Secretary of the Interior, Robert W. Johnson, in his capacity as Commissioner of the Bureau of Reclamation, J. William McDonald, in his individual capacity, and J. William McDonald, in his capacity as Regional Director of the Pacific Northwest Region of the Bureau of Reclamation, Defendants-Appellees.
• Court: U.S. Court of Appeals — Federal Circuit

579 F.3d 1345

GRANT COUNTY BLACK SANDS IRRIGATION DISTRICT (GCBSID) and Williamson Land Company, Plaintiffs-Appellants, v. UNITED STATES BUREAU OF RECLAMATION, Ken Salazar, Secretary of the Interior, Robert W. Johnson, in his capacity as Commissioner of the Bureau of Reclamation, J. William McDonald, in his individual capacity, and J. William McDonald, in his capacity as Regional Director of the Pacific Northwest Region of the Bureau of Reclamation, Defendants-Appellees.

No. 2008-1354.

United States Court of Appeals, Federal Circuit.

September 2, 2009.

Ronald Ady, Christensen Law Group, L.P., of Salt Lake City, UT, argued for plaintiffs-appellants. With him on the brief was Ronald K. Christensen.

Allen M. Brabender, Trial Attorney, Environment and Natural Resources Division, United States Department of Justice, of Washington, DC, argued for defendants-appellees. With him on the brief was Ronald J. Tenpas, Assistant Attorney General.

Before SCHALL, BRYSON, and LINN, Circuit Judges.

BRYSON, Circuit Judge.

I

In 1937, Congress authorized a multipurpose reclamation project known as the Columbia Basin project, which was designed to irrigate farmland in central Washington with water drawn from the Columbia River. Over time, water that seeped into the ground from the surface irrigation created significant quantities of artificially stored groundwater in the Quincy Basin area. The Washington Department of Ecology began managing the Quincy Basin groundwater in 1973 but later accepted the federal government's claim to ownership of that water. See Flint v. United States, 906 F.2d 471, 473-74 (9th Cir.1990); Jensen v. Wash. Dep't of Ecology, 102 Wash.2d 109, 685 P.2d 1068, 1070 (1984). The Bureau of Reclamation, an agency within the United States Department of the Interior, subsequently issued a standard form contract authorizing private landowners to use the Quincy groundwater. The contracts were executed under the authority of section 9(e) of the Reclamation Project Act of 1939 ("the 1939 Act"), Pub.L. No. 76-260, 53 Stat. 1187, codified at 43 U.S.C. § 485h(e). Since 1975, the withdrawal of Quincy groundwater by private landowners has been conditioned on the execution of the Bureau's section 9(e) contract and on the receipt of a state permit from the Washington Department of Ecology.

There are currently 292 landowners in the Quincy Basin that have entered into a water supply agreement with the Bureau of Reclamation. They include the Williamson Land Company ("Williamson") and the members of the Grant County Black Sands Irrigation District ("GCBSID"). In consideration for a "license to withdraw and use its artificially stored ground water," the Bureau charges the landowners an annual "[p]ayment for water" consisting of a variable charge for operation and maintenance, and a fixed charge of $1.70 per acre "for participation in Project construction repayment." The Bureau's standard form contract also states that the license "shall continue for a period of 10 years" and "shall be extended ... for an additional like period without further notice provided the State permit ... has been extended for a similar period."

Initially, the Washington state permits issued to the Quincy groundwater users had 10-year terms. In 1983, the Washington Department of Ecology eliminated the 10-year term limitation. The state permits are now automatically renewed subject only to the Department's authority to modify or terminate the permits "at any time for good cause." Wash. Admin. Code 173-134A-080(2)(i) (2009); see also Wash. Rev.Code. § 90.40.100 (2009). While the landowners' contracts with the Bureau have been renewed several times, the material terms and provisions of the current contracts are identical in all respects to the standard form water service contract promulgated by the Bureau in 1975.

In July 2006, the appellants brought this suit as a class action in the United States District Court for the Eastern District of Washington. The action was brought on behalf of all landowners located within the GCBSID that hold water service contracts for the withdrawal of Quincy groundwater. The complaint sought injunctive and monetary relief against the Bureau of Reclamation. The appellants' theory of the case was that they were entitled to the statutory benefits accorded to holders of "repayment contracts" and "long-term water service contracts" under reclamation law. The appellants filed two motions for partial summary judgment, and the government filed a motion to dismiss the complaint for lack of subject matter jurisdiction or, in the alternative, to render judgment on the pleadings.

The district court rejected the appellants' statutory theory and dismissed the complaint. The court canvassed the statutory provisions cited in the parties' briefs and concluded that the contracts at issue are "short-term water service contracts," not "repayment contracts" or "long-term water service contracts," and that the appellants are not entitled to the same statutory benefits accorded to holders of the latter two types of contracts. The court denied the appellants' motions for summary judgment as moot. Grant County Black Sands Irrigation Dist. v. United States, 539 F.Supp.2d 1292, 1298-99 (E.D.Wash.2008).¹ The appellants then took this appeal.

II

At the outset, the parties disagree about whether this court has jurisdiction over the appeal. The appellants argue that their claim for $10,000 in damages constituted a claim under the "Little Tucker Act," 28 U.S.C. § 1346(a)(2). Because the jurisdiction of the district court was based in part on that Act, the appellants submit that this court has appellate jurisdiction under 28 U.S.C. § 1295(a)(2). The government responds that in substance this is an appeal from the denial of a request for equitable relief and that the jurisdiction of the district court was invoked under the Administrative Procedure Act ("APA"), 5 U.S.C. §§ 701 et seq., not the Little Tucker Act. For that reason, the government contends, appellate jurisdiction lies in the Ninth Circuit, not in this court.

It is certainly true that much of the relief sought by the appellants was equitable in nature. However, this court has jurisdiction over an appeal as long as the jurisdiction of the district court was based "in whole or in part" on the Little Tucker Act. Wopsock v. Natchees, 454 F.3d 1327, 1331 (Fed.Cir.2006). The question for us is not whether the main thrust of the action in the district court was equitable, but whether the district court's jurisdiction was based, even in part, on section 1346(a)(2). The complaint listed the Little Tucker Act as one of the bases for the district court's jurisdiction and sought "specific monetary relief for illegal overcharges imposed on them by the Bureau of Reclamation." We therefore focus on the appellants' allegations with respect to the water use charges assessed by the Bureau of Reclamation.

The appellants' theory of the case proceeded from the premise that the contracts of the landowners they represent are not contracts to purchase water, but contracts to repay the federal government for their share of the construction costs of the irrigation projects. Both in the complaint and in various pleadings before the district court, the appellants cited a number of statutory provisions and court decisions as support for the proposition that any administrative overcharges assessed by the Bureau of Reclamation must be credited toward that repayment obligation or be refunded to the landowners. The complaint alleged that the Bureau of Reclamation had overcharged the landowners for the operation and maintenance of the irrigation works and that if those excess charges had been properly credited to repayment, the landowners' contractual payment obligations would have ended several years ago. The "monetary relief" sought by the appellants was a refund of the alleged overcharges for operation and maintenance, or alternatively a credit in the amount of the alleged excess charges toward the landowners' repayment obligation. In that regard, the prayer for relief included a request for judgment that the landowners are entitled to "receive an aggregate total sum of $10,000 in damages against the United States for the ... advance collection of administrative charges for administration of the Quincy Ground Water Subarea Artificially Stored Ground Water Program from the Plaintiff class."²

That theory of relief in effect seeks damages for an unlawful exaction. See United States v. Testan, 424 U.S. 392, 401-02, 96 S.Ct. 948, 47 L.Ed.2d 114 (1976); Norman v. United States, 429 F.3d 1081, 1095 (Fed. Cir.2005); Telecare Corp. v. Leavitt, 409 F.3d 1345, 1348 (Fed.Cir.2005); Aerolineas Argentinas v. United States, 77 F.3d 1564, 1582-73 (Fed.Cir.1996). Under that theory, the trial court had Little Tucker Act jurisdiction because if the appellants' theory of the case were accepted on the merits, the relief to which the landowners would be entitled would include up to $10,000 in damages by way of a refund of previous administrative overcharges. See, e.g., Brazos Elec. Power Co-op., Inc. v. United States, 144 F.3d 784, 787 (Fed.Cir.1998) ("Whether this refund is paid directly ... or whether it is credited towards other money ... owe[d] to the federal government is irrelevant to our analysis.").

Notwithstanding the reference to the Little Tucker Act in the complaint, the government argues that the appellants waived that claim. It is true, as the government contends, that the appellants' response to the government's motion to dismiss in the district court contained no express reference to the Little Tucker Act. But because the district court's jurisdiction could readily be sustained on other grounds, such as the APA, it is not surprising that the appellants focused their attention on those other grounds for opposing the motion to dismiss. In an effort to preserve their APA claim before the district court, the appellants...