Bostwick Irr. Dist. v. U.S., 2

Citation900 F.2d 1285
Decision Date17 April 1990
Docket Number88-2343,Nos. 88-2342,A,No. 2,2,s. 88-2342
PartiesBOSTWICK IRRIGATION DISTRICT, and Kansas-Bostwick Irrigation Districtppellant, v. UNITED STATES of America, Appellee. BOSTWICK IRRIGATION DISTRICT, Appellant, Kansas-Bostwick Irrigation District, v. UNITED STATES of America, Appellee.
CourtUnited States Courts of Appeals. United States Court of Appeals (8th Circuit)

C.L. Robinson, Omaha, Neb., for appellant.

Edward Shawaker, Washington, D.C., for appellee.

Before JOHN R. GIBSON and WOLLMAN, Circuit Judges, and BROWN, * Senior Circuit Judge.

WOLLMAN, Circuit Judge.

Bostwick Irrigation District and Kansas-Bostwick Irrigation District No. 2 appeal the district court's 1 denial of their request for declaratory judgment, brought under 43 U.S.C. Sec. 390uu, seeking to enjoin the Bureau of Reclamation of the Department of Interior (Bureau) from charging the Districts for expenses incurred by the Army Corps of Engineers (Corps) for operation and maintenance of the Harlan County Dam and Reservoir. We affirm.

The district court's lengthy, thorough memorandum opinion recites fully the factual background that gave rise to this litigation. We will summarize that history here.

The Harlan County Dam and Reservoir, established for the purposes of flood control and irrigation, is located along the Republican River in Harlan County, Nebraska. Construction was commenced in 1946 and completed in 1952.

On February 21, 1949, the United States, through the Bureau, entered into an irrigation agreement with the Bostwick Irrigation District. The agreement is divided into two parts. Part A governs water service and specifies the rates at which water is delivered to the District; part B governs the distribution works. Article 8(a) of part A originally provided that the contracting officer was obligated during each year of the development period to "announce to the district, in writing, the rate per acre-foot for which water will be delivered to the District during the ensuing year, estimated to cover at least operation and maintenance costs." Article 8(b) originally provided that after the development period "the District shall make payment annually for the delivery of the * * * water supply in an amount announced by the contracting officer not to exceed forty-one thousand dollars ($41,000.00)." Part B provided that the District would repay the United States' construction costs in building the water supply works. The amount specified was $2,260,000, payable in 40 equal installments.

In 1954, the United States and the District amended Article 8 of the agreement. Article 8(a) continued to define the rates for the development period, and article 8(b) continued to define the rates for the post-development period. The amendment also provided that whenever payments to the United States under 8(a) and 8(b) were "insufficient to cover the operation and maintenance costs of the reserved water supply works as defined in Article 9(b), the District shall pay to the United States the amount of such deficiency as determined and announced by the Secretary within 30 days of the receipt of the notice of such deficiency." The parties amended the agreement in a similar manner in 1957 and 1963.

In 1970 the Bureau notified the District for the first time that the cost of operation and maintenance exceeded the annual water service payment. In the following fourteen years, the Bureau notified the District eleven times of an excess of costs. All of the excess costs were the result of Bureau expenses.

On April 20, 1951, the United States, through the Bureau, entered into an irrigation agreement with the Kansas-Bostwick Irrigation District No. 2. The agreement was similar to the original U.S.-Bostwick Irrigation District agreement, and like that agreement it was amended several times. In 1957, the agreement was amended to provide that "[w]henever in any year during the term of this Part A payments by the District * * * are insufficient to cover the cost of operation and maintenance of water supply works * * * operated by the United States the District shall pay to the United States the amount of such deficiency, as determined and announced by the Secretary [of Interior], within thirty days after receipt of the notice of such deficiency." In 1963, an amendment to the agreement eliminated this language, but similar language was included in Article 8(b) of the In 1971 the Bureau notified the Kansas-Bostwick Irrigation District that the cost of operation and maintenance exceeded the annual water service payment. It again gave the District notice of excess costs in 1979, 1980, 1981, 1982, and 1983. All of these excess charges were for Bureau expenses.

agreement. This language was again changed in 1972, but no material alterations were made.

In 1981 and 1982, the General Accounting Office reviewed the operation and maintenance cost recovery systems established by the Bureau and the Corps. It discovered that through an administrative oversight the Districts had been required to pay only the operation and maintenance costs of the Bureau and not those of the Corps. Accordingly, on June 25, 1982, the Bureau advised both Districts that "beginning in 1983, a share of operation and maintenance costs for Harlan County Reservoir, which was allocated to its irrigation purpose by the Corps of Engineers, will be included in the operation and maintenance costs for the reserved water supply works pursuant to the provisions of article 8 of the contract." 2

The Districts thereupon brought this action for a declaration that the Bureau has no authority to collect the Corps' operating and maintenance expenses. The district court granted judgment for the United States, finding that (1) there is statutory authority for recovery of the Corps' operation and maintenance expenses; (2) the language and structure of the irrigation agreements is consistent with recovery of the Corps' operation and maintenance expenses; and (3) there are no defenses to prevent collection of the Corps' expenses. The Districts appeal.

I. Statutory Authorization

Our analysis begins with determining whether the Bureau has statutory authorization to collect the operation and maintenance costs of the Corps. We set forth a brief review of the history of the pertinent legislation. For a much more detailed account of the genesis of the legislation that resulted in the construction of the several flood control and irrigation projects in the Missouri River Basin, see this court's opinion in Missouri v. Andrews, 787 F.2d 270 (8th Cir.1986), and the Supreme Court's opinion in ETSI Pipeline Project v. Missouri, 484 U.S. 495, 108 S.Ct. 805, 98 L.Ed.2d 898 (1988), which affirmed Andrews.

Due to severe flooding in the Missouri River Basin in 1943 and 1944, Congress requested the Army Corps of Engineers to prepare a flood control plan. The result was the Pick Plan, which described a comprehensive plan to develop the entire Basin. During the same time, the Interior Department's Bureau of Reclamation independently developed a plan for the Missouri River Basin. The plan, named the Sloan Plan, was also comprehensive, but its central purpose was to provide for irrigation. In 1944, a congressional committee met to reconcile the two plans. The result was the Pick-Sloan Plan, which ultimately fostered the Flood Control Act of 1944 (Act). 33 U.S.C. Secs. 701-1 to 709.

Section 8 of the Act provides that the Corps controls the main-stem reservoir projects and the Interior Department controls any irrigation works that it constructs, operates, or maintains at the main-stem reservoir projects. See 43 U.S.C. Sec. 390. Section 8 also provides that "irrigation works may be undertaken only after a report and findings thereon have been made by the Secretary of the Interior * * * and, within the limits of the water users' repayment ability such report may be predicated on the allocation to irrigation of an appropriate portion of the cost of structures and facilities used for irrigation and other purposes." Id.

Section 8 specifically provides that the Department of Interior exercises its authority under the federal reclamation laws. The thrust of [section 8] is to make the reclamation laws applicable to irrigation benefits made available from irrigation works constructed in Army-controlled multiple-purpose reservoirs. The salient concern is to ensure that the details of the reclamation laws--addressing such matters as cost allocation and acreage limitations--apply to contracts for irrigation benefits from reservoirs undertaken by the Army.

Id. We previously summarized this authorization as follows:

Missouri v. Andrews, 787 F.2d at 283. Thus, section 8 of the Flood Control Act makes applicable to the Harlan County Dam and Reservoir Project--an Army-constructed and maintained reservoir that supplies irrigation benefits--the Reclamation Project Act of 1939, 43 U.S.C. Secs. 485-485k.

Section 9(e) of the Reclamation Project Act authorizes the Secretary of Interior to enter into short or long-term contracts to furnish water for irrigation purposes. Section 9(e) also provides that

[e]ach such contract shall be * * * at such rates as in the Secretary's judgment will produce revenues at least sufficient to cover an appropriate share of the annual operation and maintenance cost and an appropriate share of such fixed charges as the Secretary deems proper, due consideration being given to that part of the cost of construction of works connected with water supply and allocated to irrigation * * *.

43 U.S.C. Sec. 485h(e).

Read together, section 8 and section 9(e) authorize the collection of operation and maintenance costs incurred by the Corps. The reclamation laws define the Interior Department's authority to control irrigation works at Corps constructed reservoirs, requiring the Department to recover the operation and maintenance costs of irrigation works from irrigation users. Section 9(e) does not limit...

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