Cal. Dep't of Water Res. v. United States
| Decision Date | 04 October 2016 |
| Docket Number | No. 15-1563C,15-1563C |
| Parties | CALIFORNIA DEPARTMENT OF WATER RESOURCES, Plaintiff, v. THE UNITED STATES, Defendant. |
| Court | U.S. Claims Court |
28 U.S.C. § 1491(a); Contract Disputes Act, 41 U.S.C. §§ 7101-09.
Matthew Goldman, Deputy Attorney General, Tracy L. Winsor, Supervising Deputy Attorney General, Kamala D. Harris, Attorney General of California, Sacramento, CA, for plaintiff.
Geoffrey M. Long, Trial Attorney, Douglas K. Mickle, Assistant Director, Robert E. Kirschman, Jr., Director, Benjamin C. Mizer, Principal Deputy Assistant Attorney General, Commercial Litigation Branch, Civil Division, United States Department of Justice, Washington, DC; Koji Kawamura, Attorney, Western Area Power Administration; Tosh Sagar, Attorney-Advisor, Department of the Interior, for defendant.
The California Department of Water Resources ("CDWR") brought this breach of contract action to recover scheduling coordinator charges arising from its operation of certain water storage and distribution facilities located in the State of California on behalf of the United States Bureau of Reclamation, pursuant to the Contract Disputes Act ("CDA"), 41 U.S.C. §§ 7101-09. The government has moved to dismiss this matter for lack of subject-matter jurisdiction, pursuant to Rule 12(b)(1) of the Rules of the United States Court of Federal Claims ("RCFC"), and for failure to state a claim upon which relief may be granted, pursuant to RCFC 12(b)(6). For the reasons discussed below, the CDWR has not demonstrated that it has entered into a contract with the United States that falls within the scope of the CDA. And so, the Court GRANTS the government's motion to dismiss this matter for lack of subject-matter jurisdiction.
In this Contract Disputes Act matter, the California Department of Water Resources, seeks to recover $10,473,957 in damages from the United States Bureau of Reclamation ("USBR") and the Western Area Power Administration ("WAPA"), as reimbursement for scheduling coordinator charges that the CDWR incurred in connection with its operation of certain water storage and distribution facilities ("Scheduling Coordinator Charges"). Compl. at ¶¶ 38, 100-101.
The CDWR maintains and operates the California State Water Project ("SWP"), which is a multipurpose water project that includes water storage facilities, aqueducts, pipe lines, pumping plants and power plants located in California. Id. at ¶ 3. The CDWR operates the Banks Pumping Plant, a state-owned facility, as part of the SWP. Id. at ¶ 92.
The USBR is responsible for the Central Valley Project ("CVP"), a federal multipurpose water project in California that includes the San Luis Unit, which consists of certain water storage and distribution facilities that are jointly used by the CDWR and the USBR ("Joint-Use Facilities") and certain water storage and distribution facilities that are used solely by the federal government ("Federal-Only Facilities"). Compl. at ¶¶ 4, 6; Def. Mot. at 4; Supp. Agreement, Art. 9(e), 22, Explanatory Recitals.
The CDWR operates and maintains the Joint-Use Facilities, and it periodically pumps federal water through the state-owned Banks Pumping Plant on behalf of the USBR. Compl. at ¶ 14. During the period 1998 to 2004, the CDWR paid Scheduling Coordinator Charges to the California Independent Systems Operator ("CAISO") to schedule energy for delivery to the Joint-Use Facilities and the state-owned facilities, including the Banks Pumping Plant, on behalf of the USBR. Id. at ¶¶ 38-39, 100-01.
In this action, the CDWR seeks to recover the Scheduling Coordinator Charges that it paid on behalf of the USBR during the period 1998 to 2004 to operate the Joint-Use Facilities and the Banks Pumping Plant.2 Id. at ¶¶ 100-01. The CDWR further alleges that the USBR and the WAPA are contractually obligated to reimburse the CDWR for a portion of these charges under three agreements that the CDWR and the United States entered into between 1961 and 1986. Id. at ¶¶ 91-92. A discussion of these agreements follows.
In 1960, Congress enacted the San Luis Act, which authorized the Secretary of the Interior to "construct, operate, and maintain" the San Luis Unit. Pub. L. 86-488 at § 1, 74 Stat. 156. The Act provides that "for the principal purpose of furnishing water for the irrigation of approximately five hundred thousand acres of land. . . hereinafter referred to as the Federal San Luis [U]nit service area. . . the Secretary of the Interior is authorized to construct, operate and maintain the San Luis [U]nit." Id. at § 1(a). The Act further authorized the Secretary of the Interior to negotiate and enter into an agreement with the State of California to provide for the coordinated operation of the Joint-Use Facilities, so that the State may deliver water in areas located outside the Federal San Luis Unit service area without cost to the United States. Id. at § 2.
The San Luis Act provides that, if the Secretary and the State of California enter into such an agreement, the parties would design and construct the Joint-Use Facilities to permit "immediate integration and coordinated operation with the State's water projects." Id. at § 3(a). In this regard, the Act requires the State of California to "convey to the United States title to any lands, easements, and right-of-way which it then owns and which are required for the joint-use facilities." Id. at § 3(e). The Act also requires the State of California and the United States to each pay "an equitable share of the operation, maintenance, and replacement cost of the [J]oint-[U]se [F]acilities." Id. at § 3(d).
Pursuant to the San Luis Act, the United States and the CDWR entered into the Joint Use Agreement in December 1961. See generally Joint Use Agreement. The explanatory recitals for the Joint Use Agreement provide, in pertinent part, that:
[C]onstruction, operation, and maintenance of the joint-use facilities of the San Luis [U]nit will bring about substantial reductions in cost outlays otherwise required of both the State and the United States, will efficiently develop water resources for the benefit of the people of California and the United States, will provide incidental recreational opportunities, and will make possible the furnishing of water to water-short areas in both the Federal and State service areas at the earliest possible date.
Id. at Explanatory Recitals. Under the terms of the Joint Use Agreement, the United States is responsible for the construction of the Joint-Use Facilities and the State of California and the United States share the costs of construction. Id. at Art. 13(a), 16.
The Joint Use Agreement also requires that the State of California convey title to the land required for the Joint-Use Facilities to the United States. Id. at Art. 14. The agreement further provides that the State of California would begin operating and maintaining the Joint-Use Facilities after the facilities become operable. Id. at Art. 20(a), (d). In this regard, the agreement provides that the State of California and the United States would:
[E]ach pay annually an equitable share of the operation . . . . The method of computation of the share to be paid by each agency shall be mutually agreed to by the State and the United States before the transfer of care, operation, and maintenance of joint-use facilities.
Id. at Art. 21(a). And so, under the Joint Use Agreement, the United States is responsible for a share of the costs related to the total cost of care, operation, maintenance and replacement of any joint-use facility. Id. at Art. 21(a).
On January 12, 1972, the United States and the CDWR entered into the "Supplemental Agreement between the United States and the State of California for the Operation of the San Luis Unit" ("Supplemental Agreement") to resolve several outstanding issues related to the Joint Use Agreement. See Supp. Agreement, Explanatory Recitals; see also Compl. at ¶ 7. To that end, the Supplemental Agreement addresses certain requirements and responsibilities of the State of California and the United States in operating the Joint-Use and Federal-Only Facilities. See Supp. Agreement, Art. 12-16.
Specifically, under the Supplemental Agreement, the United States and the State of California are jointly responsible for preparing forecasts of proposed water and power operations related to the Joint-Use Facilities. Id. at Art. 11. The agreement also requires that each party supply the power necessary to pump its own water at certain Joint-Use Facilities. Id. at Art. 17. In addition, the Supplemental Agreement provides that the State of California is "responsible for reading, maintaining, and repairing meters necessary for capacity, energy, and reactive measurements at" certain Joint-Use Facilities. Id. at Art. 27. The agreement also provides that "the costs of the care, operation, maintenance, and replacement of the joint-use facilities . . . shall be allocated 55 percent to the State and 45 percent to the United States." Id. at Art. 34(b).
The Supplemental Agreement also sets forth the obligations of the State of California and the United States with respect to certain facilities which are also part of the San Luis Unit. Id. at Explanatory Recitals, Art. 22. In this regard, the agreement provides that "the State shall operate and maintain certain facilities which are part of the Federal San Luis Unit, but are not part of the joint-use facilities, upon the terms set forth in [the] supplemental agreement." Id. at Explanatory Recitals. The Supplemental Agreement further provides that the United States will be charged for all costs "incurred by the State chargeable to the Federal-only facilities." Id. at Art. 34(a); see also Pl. Resp. at 14.
Lastly, on October 27, 1986, President Reagan signed into law...
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