Fox v. Ickes

• Decision Date: 30 June 1943
• Docket Number: No. 8263-8265.,8263-8265.
• Citation: 137 F.2d 30
• Parties: FOX et ux. v. ICKES, Secretary of the Interior. PARKS et ux. v. SAME. EDER v. SAME.
• Court: U.S. Court of Appeals — District of Columbia Circuit

137 F.2d 30 (1943)

FOX et ux. v. ICKES, Secretary of the Interior. PARKS et ux. v. SAME. EDER v. SAME.

Nos. 8263-8265.

United States Court of Appeals for the District of Columbia.

Argued April 7, 1943.

Decided June 30, 1943.

Mr. Stephen E. Chaffee, of Sunnyside, Wash., with whom Messrs. E. C. Finney and Wm. G. Feely, both of Washington, D. C., were on the brief, for the appellants in Nos. 8263, 8264 and appellant in No. 8265.

Messrs. Clifford E. Fix, Associate Chief Counsel, and J. Kennard Cheadle, Chief Counsel, both of the Bureau of Reclamation, Department of the Interior, both of Washington, D. C., with whom Messrs. Warner W. Gardner, Solicitor, Department of the Interior, of Washington, D. C., and B. E. Stoutemeyer, District Counsel, of Portland, Or., and Richard J. Carr, Attorney, both of the Bureau of Reclamation, Department of the Interior, of Washington, D. C., were on the brief, for the appellee in each case.

Before EDGERTON and ARNOLD, Associate Justices, and EICHER, Chief Justice of the District Court.

ARNOLD, Associate Justice.

In 1905, under the authority of the Reclamation Act¹ the Secretary of the Interior undertook the construction and operation of the Yakima Project to irrigate lands in the State of Washington. In connection with this project the United States appropriated the unappropriated waters of the Yakima River under the statutes of the State of Washington.² It has kept these appropriations in good standing.

The appellants in the three appeals, which are consolidated here, have water-rights in the Sunnyside Division of the Yakima Project. These rights are based on water-right applications in the form of contracts with the United States made under the authority of the Reclamation Act. In all three cases a public notice dated March 2, 1909, fixed the obligations of appellants' predecessors at the sum of $52.00 an acre as a construction charge. The applications specified different amounts of water to be furnished in each of the three cases before us. In the Eder case the amount was three acre-feet per acre "or so much thereof as shall constitute the proportionate share per acre from the water supply actually available for the lands under said project." In the Parks case the amount was three acre-feet per acre "or as much as will be required successfully to irrigate the land, the amount so required to be determined by the authorized agent of the United States." In the Fox case the amount was "that quantity of water which shall be beneficially used * * * but in no case exceeding the share proportionate to irrigable acreage, of the water supply actually available as determined by the Project Manager or other proper officer of the United States."

Prior to 1930 the local managers and ditch masters of the projects distributed water to the lands in question here in amounts considerably in excess of three acre-feet. But by 1930 a shortage of water developed because of a dry cycle, and also because, as the project developed, more lands came under irrigation. To meet this shortage the Secretary of the Interior proposed the construction of a new reservoir (the Cle Elum Dam) to supply water to the project.

Under an Act of March 3, 1915,³ before new construction can be undertaken for lands, the construction charge for which has been fixed by public notice, it is necessary to gain the consent of a majority of water-users affected by such increased cost. Negotiations were therefore commenced with the Sunnyside District, of which appellants are members, to induce them to agree to charges for the additional water to be supplied from the proposed new construction. The water-users refused.

Thereupon, in October, 1930, the Secretary issued a public notice setting out a plan to reimburse the Reclamation Fund for the cost of the new construction without consent of the water-users. The intent of this notice was to fix a limit on the amount of water which would be delivered to the users in the Sunnyside Division unless they paid an additional charge over and above the $52 an acre specified in the 1909 public notice. In determining the amounts of water to which the lands were entitled without additional charge the Secretary construed the original applications for water under the project as contracts with the Government. In cases like the Eder contract the amount was limited to the three acre-feet specified in the application. In cases like the Fox contract, where the application gave the user a "proportionate share" of the water, the proportion was fixed at and limited to three acre-feet. In cases like the Parks contract, where the measure of water was the beneficial use, an expert appointed by the Secretary fixed such beneficial use at three and one-half acre-feet per acre. It is admitted that these amounts were much less than the water which had been previously delivered to these lands by the Secretary.⁴

After fixing these amounts which were to be delivered without extra charge, the notice offered additional water for the same lands (provided it was available) at an annual rental of $1.50 per acre-foot. These rentals were to be applied to "the unsecured portion of the cost of the reservoir system in the Yakima project".

The notice then pointed out the advantages of paying this rental charge for additional water. It stated that the amount of water required to grow a successful crop depended upon labor and money in the preparation of lands and equipment to avoid waste. It pointed out that cheap storage sites were available "particularly at Lake Cle Elum," and that it might be cheaper for a user to help pay for this storage by renting additional water than "to provide the necessary labor and equipment to secure an economical use of water". Finally, the notice offered each user the opportunity to procure "additional storage by participation in the construction of another reservoir" if he preferred that course to "strict economy in the use of the existing water supply".

The apparent expectation that water-users would pay this rental charge enabled the Secretary to make a finding that the proposed construction of the Cle Elum Dam would probably repay its cost to the United States. That finding was set out in a letter to the President dated December 11, 1930, in which the Secretary stated that $1,000,000 of the cost of the Cle Elum Dam was to be repaid by rentals from the Sunnyside Division of the Yakima project.

The project was approved and the dam constructed. Appellants were informed that no water in excess of three acre-feet in the Fox and Eder cases, and three and one-half acre-feet in the Parks case would be furnished unless they signed an agreement to pay additional rent.

The intention of the Secretary is to make a charge for any water distributed to appellants' lands which is over and above the amounts which he has determined to be within the obligations of the contracts signed by the appellants' predecessors in interest. The purpose of the charge is to reimburse the Reclamation Fund for the proportion of the construction cost of the Cle Elum Reservoir which the Secretary assessed to the Sunnyside Division of the Yakima project.

Appellants seek to enjoin the Secretary from carrying out his intention as expressed in his notice of October, 1930, and his subsequent actions. During the proceedings the Secretary revoked the notice and moved that the actions be dismissed on the ground the cases had become moot. However, it is clear from the record that the Secretary still intends to impose a charge upon available water to be furnished on appellants' lands and, therefore, the revocation of the notice itself (which is simply evidence of his intention) does not remove the substance of appellants' causes of action.

The position of the Secretary is that the applications made by appellants' predecessors in interest were contracts which define the maximum amount of water which the Government is to furnish for a construction charge of $52.00 per acre. According to this theory, additional water must be paid for by the users in order to reimburse the Reclamation Fund for the new construction which made that additional water available.

The court below followed the theory of the Secretary that the applications for water-rights under the Yakima project were contracts with the government. It interpreted these contracts to mean that the Secretary was entitled to determine the amount of water which he was under obligation to deliver to appellants without extra charge, and that his decision could not be reviewed since it had been fairly arrived at and supported by substantial evidence.

In holding that appellants' rights were dependent on the enforcement of contracts with the United States, we think the trial court failed to follow the decision in Ickes v. Fox,⁵ decided by the Supreme Court in a previous appeal in these proceedings. That appeal arose on motion to dismiss on the ground that the government was an indispensable party. In denying that motion the Supreme Court held that the rights of applicants were not limited to the enforcement of any contract with the government. The opinion said: "Under the Reclamation Act, * * * as well as under the law of Washington, `beneficial use' was `the basis, the measure, and the limit of the right.' * * * Appropriation was made not for the use of the government, but, under the Reclamation Act, for the use of the landowners; and by the terms of the law and of the contract already referred to, the water rights became the property of the landowners, wholly distinct from the property right of the government in the irrigation works."

A petition for rehearing filed in the Supreme Court by the Solicitor General makes it apparent that the principal issue in this case was before the Supreme Court on the former appeal. In that petition for rehearing the Solicitor General pointed out to the Court that the decision would lead to serious consequences in the administration of the...